How much does cartwright need to borrow and when

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Reference no: EM13865981

Case study: Cartwright Lumbeer Campany

Part -1:

Q1a Discuss how the interest expense (row 25) calculation works and whether or not it includes the short term borrowing on the Cartwright balance sheet. HINT: What is the source of the data used in the ratio on row 14?

Q1b How much does Cartwright need to borrow and when? Explain by citing specifics from the forecast.

Q1c Does Cartwright have the ability to pay the interest expense? Explain by citing specifics from the forecast.

Q1d Does Cartwright have the ability to repay the loan principal? Explain by citing specifics from the forecast.

Part -2:

Q2a Explain how the table from the Cohen Finance Workbook, shown above starting on row 47, works and its significance to Cartwright's (and most other businesses too) external financing needs problem.

Q2b Revise the short-form forecast model from Q1, using the 'input cells zeroed' model at the top of this tab.

As the banker, assume a lower growth rate in sales, and explain, showing specifics from the revised forecast, how it helps Cartwright solve his external financing needed problem. Enter revised data in the blue cells, using your judgment.

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Reference no: EM13865981

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