Working Capital Management04-373-30 (Summer 2014, Fenn)Final Exam FormatPart I – True and false and short answer formatTwenty (20) true and false questions (in total) related to cash, accounts receivable,inventory, deferred taxes, debt financing, lending criteria, ratio analysis, working capitalstructuring and valuation. A calculator will be required for some questions. Also, oneshortanswer question will be asked related to working capital lessons learned in the course.Part II – Potential exam questionsThe Talich Fabricating Inc. (Talich) case will be used on the final exam and given to you atthe July 28thclass. The owner needs funds to finance an expansion. You should analyze thecase from a lender’s perspective.1.Does the industry, company history and ratio analysissupport a viable on-goingbusiness that a banker would want to finance? Yes or no and reasons.2.Does the 7C’s approachsupport financing the business? Yes or no and reasons.3.What is the forecastedincome statement, statement of financial position andstatement of cash flows for 1996? Do the forecasted financials support financing thebusiness? Yes or no and reasons.4.What terms would you place on a loan to the company based on the value of thecompany including its net assets?Explain key terms such as percent of value, lengthof loan, and interest rate.5.Does the expansion opportunityaffect the profitability and working capital needs ofthe company? Yes or no and reasons.Your answer for each question will not be more than 3 pages (hand-written during theexam). You can use bullets and charts within these three pages. I am expecting a well laid-out answer that could be presented to the board of directors of Talich. The answers shouldbe very concise with relevant support from your analysis to support a decision. Two (2)questions will be given to you at the exam to answer.For the final exam, no computers will be allowed in the classroom but you can bring in youranalysis and notes regarding the Talich case. Otherwise, the final exam is closed book.
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