Find what is minimum line of credit to request from a lender

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Reference no: EM132575859

Cash is King!

Good 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

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

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?

Reference no: EM132575859

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