04 NCAC 02R .0902. MAINTENANCE OF WORKING CAPITAL

(a)  As used in this Rule, "working capital" means the total of cash, investments and inventory less all unsecured liabilities.

(b)  A local board shall set its working capital requirements at not less than two weeks' average gross sales of the latest fiscal year nor greater than:

(1)           four months of the latest fiscal year for boards with gross sales less than one million five hundred thousand dollars ($1,500,000);

(2)           three months of the latest fiscal year for boards with gross sales greater than or equal to one million five hundred thousand dollars ($1,500,000) and less than fifty million dollars ($50,000,000); and

(3)           two months of the latest fiscal year for boards with gross sales equal to or greater than fifty million dollars ($50,000,000).

Gross sales means gross receipts from the sale of alcoholic beverages less distributions as defined in G.S. 18B-805(b)(2),(3), and (4).

(c)  A local board is considered insolvent if all of the following conditions apply:

(1)           the local board does not adhere to the working capital requirements as stated in Paragraph (b) of this Rule;

(2)           the local board's current assets are less than the local board’s current liabilities and the current portion of long term debt;

(3)           the local board is unable to pay its debts as they fall due; and

(4)           the Commission believes that continued operation of the local board will not lead to profits in the next fiscal year.

(d)  As used in this Rule, "long term debt" means the loans and financial obligations lasting over one year.

 

History Note:        Authority G.S. 18B-100; 18B-203(a)(20); 18B-702(u);18B-805(d);

Eff. January 1, 1982;

Amended Eff. November 1, 2011; July 1, 1992; June 1, 1988; May 1, 1984.