- 15 - cost. Second, in November 1982, Cascade hired a new controller, Lee Fromson (Fromson), who implemented certain changes in Cascade's financial operations that improved its cash-flow during 1983. For instance, Fromson introduced the corporation to computers, which Cascade used to automate its system of accounting for sales and receipts. To quickly improve the corporation's cash-flow, Fromson hired a full-time credit manager who expeditiously collected the accounts receivable and a purchasing manager who negotiated more favorable prices and payment terms with the corporation's vendors. Most importantly, to fund Cascade's growth, Fromson negotiated with the bank for an increased line of credit at a lower rate of interest, and he convinced the corporate officers to use it. The credit limit was increased to $125,000 in April and to $150,000 in June 1983, and the initial interest rate was fixed at 11.5 percent. For the years 1983 through 1986, the credit limit was increased to $300,000, and in 1987 it was increased to $500,000. These lines of credit were secured by, and limited to the value of, Cascade's accounts receivable and its finished goods inventory. The improved cash-flow allowed Cascade to pay its officers and to become current on its patent payment obligations under the 1982 agreement at the same time it improved its manufacturingPage: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
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