W.7- (8)

Sailboats Etc. is a retail company specializing in sailboats and other sailing-related equipment. The table shown here, contains financial forecasts as well as current (month 0) working capital levels. During which month is the firm's change in net working capital the greatest? When does it have surplus cash? We calculate the changes in net working capital for the firm: (Round to two decimal places.)

($000)	0	1	2	3	4	5	6
Net Income		$10.14	$11.83	$15.08	$25.01	$30.05	$17.86
Depreciation		2,09	3,07	2,98	3,94	4,97	3,98
Capital Expenditures		1,18	0	0	1,18	0	0
Levels of Working Capital
Accounts Receivable	$1.92	$2.94	$3.92	$5.09	$7.01	$10.09	$5.97
Inventory	3,04	2,08	3,92	5,05	5,07	4,07	1,91
Accounts Payable	1,95	1,95	1,95	1,95	1,95	1,95	1,95
(000) 1 Change in accounts receivable.$ Change in inventory-------$ Change in accounts payable----------------------$ Change in net working capital---------------------- $

W.7 (9)

Quarterly working capital levels for your firm for the next year are included in the following table. What are the permanent working capital needs of your company? What are the temporary needs? Quarter (000) 1 2 3 4 Cash $100 $100 $100 $100 Accounts Receivable 197 103 104 596 Inventory 201 498 896 54 Accounts Payable 103 100 100 97 What are the permanent working capital needs of your company? The permanent working capital needs of your company are $ ---------. (Round to nearest dollar.)