Summary. In this business case, a shift from seasonal to monthly toy production will change the seasonal cycle of Toys World's working capital needs and require new bank credit arrangements. be analyzed the company's performance, predict funding needs and make a recommendation. The case introduces the model of current assets and cash flows in a seasonal business and provides an elementary exercise in constructing the pro forma financial statement and estimating funding needs. Toy World had to address two fundamental questions, as follows: - The first one is whether it should move to a monthly production level. - The second area of ​​concern is the financial agreement with the bank. These two points are analyzed in detail here in this document. Finally, I have suggested some recommendations for the issues I mentioned above. In reference to the first number, it will be beneficial for the company to move to the monthly production level. In reference to the second issue, Toy World will have to get a bigger loan. If the company follows these recommendations, it will make a profit of $531,000 which represents $180,000 more than seasonal production. BackgroundToy World, Inc is a manufacturer of children's plastic toys, founded in 1973 by David Dunton. In the past, the company's production schedules were always highly seasonal, reflecting the seasonality of sales. Jack McClintock, president and co-owner of this company, is considering a proposal to adopt level monthly production for next year. Main questions: The two main questions that need to be analyzed are: 1. Should the toy world move from seasonal production to level monthly production? The first problem to analyze is whether we should adopt a level monthly production policy, or whether we should continue with seasonal production. You need to study what the opportunities and risks are for the company if they adopt the change.2. Financial Arrangement with BankIf level production is adopted, funding needs will change and the company will have to renegotiate agreements with its primary bank, City Trust Company.Insights on Key Issues1. Should Toy World switch from seasonal production to leveled monthly production? With seasonal production there are many problems. Overtime bonuses have reduced profits, seasonal expansion and contraction of the workforce has led to recruitment difficulties and high training and quality control costs, etc...