Miller Building Supplies
Question 2: (20 points) Are there specific working capital management suggestions that you can make to the company?
(Hint: Use Miller’s balance sheet and income statement (Exhibits C3.2 and C3.3) to calculate ratios and compare to industry ratios (Exhibits C3.4). Provide suggestions based on this analysis.
Question 3: (15 points) If a line of credit is requested from the Bank, should it be offered? At what interest rate?
(Hint: refer back to LOC section in CH4)
Question 4: (65 points) Would a monthly cash budget improve forecasting and provide support for a line of credit? If so, provide a cash budget (to the best of your ability based on the data in the case).
Use format similar to Exhibit 4.2 (see Excel spreadsheet below). For sales, use the information in Exhibit C3.1 and divide each quarter by 3 to get monthly numbers. Since we don’t know the minimum cash requirement, you can stop at ending cash.