The case deals with a medium-sized textile mill's application for revision of loan limits in order to meet working capital requirements. The additional working capital is required for financing a new product mix and the consequent changes in its distribution channel. The case also gives monthly data on the fluctuations in the price of cotton and thus provides an opportunity to determine the purchase pattern of cotton to hedge against the price fluctuations. The situation requires that working capital needs be assessed by a bank officer, and illustrates the superiority of monthly cash budgeting method to annual peak requirements as the basis for sanctioning working capital needs.