Compute what minimum line of credit to request from lender

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Food cash management is an essential job of the financial manager! You own a small auto sales business called King Kars. You stock up on inventory in February, April, June, and September. Your annual cash budget indicates that your MONTHLY NET CASH for the year will be the following:

JAN $5,000

FEB -$30,000

MAR $20,000

APRIL -$35,000

MAY $25,000

JUNE -$10,000

JULY $25,000

AUG $25,000

SEPT -$30,000

OCT $15,000

NOV $15,000

DEC $25,000

Point 1: You begin the year with a cash balance of $50,000, and the minimum cash balance desired must be $50,000 every month. Make a cash flow summary and external financing summary as noted in the Excel spreadsheet assigned to.

Question 1: Do you believe that the company needs outside financing?

Question 2: What is the minimum line of credit to request from a lender?

Question 3: Do you think you are a good candidate for the line of credit? Why or why not?

Reference no: EM132486198

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