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Sailboats, Etc is a retail company specializing in sailboats and other sailing related equipment. The table...

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?

0 1 2 3 4 5 6

Net income 10.42 12.14 15.08 24.72 29.72 17.75

Depreciation 1.93 2.91 3.04 4.07 4.99 3.96

Capital Expenditures 1.02 0.00 0.00 1.05 0.00 0.00

Levels of working Cap.

Accounts Rec.    1.92 2.98 3.96 4.99 7.05 10.04 6.01

Inventory 2.94 1.95 3.91 4.99 5.05 4.01 2.02

Accounts Pay. 1.95 1.95 1.95 1.95 1.95 1.95 1.95

Please if you work out this problem can you do it by hand, so that I may learn the steps in doing this problem. I do not follow Excel that well. Thank You

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Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

JUST WRITTEN IN EXCEL. NO FORMULAS USED AT ALL. IT IS ALL BASIC MATHS. THANK YOU

CHANGES IN WORKING CAPITAL :

ACCOUNT RECEIVABLE = t(n) - t(n-1) = t(1) - t(0) = 2.98 - 1.92 = 1.06, t(2) -t(1) = 3.96 - 2.98 = 0.98 and so on

same way for inventory and accounts payable

jeff jeffy answered 1 year ago
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