Read more about the article Business Finance | The Big River | Chapter 2 – No Cash? Can we borrow what we need?
The Big River series is a 12 part installment about a company desperately seeking cash to fuel their growth and the struggles they face trying to find it.

Business Finance | The Big River | Chapter 2 – No Cash? Can we borrow what we need?

The  Big River series
The Big River series is a 12 part installment about a company desperately seeking cash to fuel their growth and the struggles they face trying to find it.

 

What happens if we run out of cash?

“John, are you ready for our meeting? We said yesterday that we were going to meet to go over our financial projections and review a possible bank proposal.”

“I’ll be right there, Tom,” John Wilson, company CEO said to his controller.

John reflected on their conversation last week about the Company’s expected negative cash flow and the need to borrow from their bank, most of which resulted from giving extended terms to their customers.

John learned his lesson and wanted to avoid borrowing, but Tom had been pretty explicit about the need.

First, we need to review our short term cash needs

“John, I’ve gone over our short term cash needs again,” Tom said after they gathered in the conference room and were looking at some numbers on the overhead projector.

“I’ve created a simple example on the screen with all the numbers shown in thousands, which you can see in Figure 1 – Borrowing Availability, below. (more…)

Continue ReadingBusiness Finance | The Big River | Chapter 2 – No Cash? Can we borrow what we need?
Read more about the article Business Finance | The Big River | Chapter 1 – We’re Making Money. Why Are We Broke?
The Big River series is a 12 part installment about a company desperately seeking cash to fuel their growth and the struggles they face trying to find it.

Business Finance | The Big River | Chapter 1 – We’re Making Money. Why Are We Broke?

The Big River series
The Big River series is a 12 part installment about a company desperately seeking cash to fuel their growth and the struggles they face trying to find it.

“We’re broke,” Tom mumbled to himself. Tom Sampson is the controller of Ace Business Stuff and was reviewing his latest calculations about their cash flow.

“What do you mean, we’re broke?” Tom looked up sheepishly to see John Wilson standing in his doorway. He fingered his collar and turned to address the company’s CEO. “We can’t be broke because business has never been better,” John said. (more…)

Continue ReadingBusiness Finance | The Big River | Chapter 1 – We’re Making Money. Why Are We Broke?