TPG Industries, a company that manufactures athletic equipment, began business in September 2016. Below is the operating section of the company's statement of cash flows. Although management has not disclosed a sales forecast, they forecast an increase in sales next year. Because of this, management plans to add $1,600,000 to inventory. However, at the end of the year, the company has less than $80,000 in cash.
You have just taken the position of financial analyst with a major investment bank. Your supervisor, John Denbear, has asked you to write a short memo about problems facing TPG. You know that losses and negative cash flow during start-up phases of businesses are common. In your memo, include discussion about the typical sources of financing that may or may not be available to support TPG's inventory expansion.

Question

TPG Industries, a company that manufactures athletic equipment, began business in September 2016. Below is the operating section of the company's statement of cash flows. Although management has not disclosed a sales forecast, they forecast an increase in sales next year. Because of this, management plans to add $1,600,000 to inventory. However, at the end of the year, the company has less than $80,000 in cash.
  You have just taken the position of financial analyst with a major investment bank. Your supervisor, John Denbear, has asked you to write a short memo about problems facing TPG. You know that losses and negative cash flow during start-up phases of businesses are common. In your memo, include discussion about the typical sources of financing that may or may not be available to support TPG's inventory expansion.

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The Answer of TPG Industries, a company that manufactures athletic equipment, began business in September 2016. Below is the operating section of the company's statement of cash flows. Although management has not disclosed a sales forecast, they forecast an increase in sales next year. Because of this, management plans to add $1,600,000 to inventory. However, at the end of the year, the company has less than $80,000 in cash.
  You have just taken the position of financial analyst with a major investment bank. Your supervisor, John Denbear, has asked you to write a short memo about problems facing TPG. You know that losses and negative cash flow during start-up phases of businesses are common. In your memo, include discussion about the typical sources of financing that may or may not be available to support TPG's inventory expansion.

TPG Industries, a Company That Manufactures Athletic Equipment, Began Business