The owner of a metal furniture manufacturing company is seeking funds to help finance his firm's expansion. He has arranged a mortgage with a life insurance firm to finance the addition to his plant. He is now trying to arrange a working capital loan with his bank manager. There were heavy pressures on manufacturers of metal furniture in recent years and the cost/price squeeze has forced out many weaker manufacturers. Talich Fabricating Inc. survived due to the managerial competence of the owner who anticipates a big sales increase, since the number of competitors has decreased considerably. He believes that this decreased pressure will enable him to increase prices to improve his profitability, which has suffered during the industry shake-out. The loan proposal must be evaluated by the bank manager in view of a head office memo suggesting the loans be limited to proposals offering the highest return with the least risk. As the bank manager, students should evaluate the loan proposal considering the character of the owner/manager, business conditions, capacity to repay, and available collateral. Talich Fabricating Inc. is a complex case, and should be used near the end of an introductory finance segment.

A machine tools distributor is planning to build an extension onto its warehouse. The owner is concerned how to source the $100,000 required to finance the expansion. Options include borrowing from a bank, borrowing from a private lender, or issuing shares. This case is intended to introduce students to financial analysis. The concepts of ratio analysis, projected statements and debt repayment are central to the case. The case requires students to draft a set of projected statements to determine the amount of required financing, assess the financial health of the company and its ability to take on more debt.