17 Jun Short Term Financial Management
To avoid any uncertainty regarding his business’ financing needs at the time when such needs may arise, Cyrus Brown wants to develop a cash budget for his latest venture: Cyrus Brown Manufacturing (CBM). He has estimated the following sales forecast for CBM over the next 9 months:
March $100,000
April $275,000
May $320,000
June $450,000
July $700,000
August $700,000
September $825,000
October $500,000
November $115,000
He has also gathered the following collection estimates regarding the forecast sales:
Payment collection within the month of sale = 25%
Payment collection the month following sales = 55%
Payment collection the second month following sales = 20%
Payments for direct manufacturing costs like raw materials and labor are made during the month that follows the one in which such costs have been incurred. These costs are estimated as follows:
March $187,500
April $206,250
May $375,000
June $337,500
July $431,250
August $640,000
September $395,000
October $425,000
Additional financial information is as follows:
Administrative salaries will approximately amount to $35,000 a month.
Lease payments around $15,000 a month.
Depreciation charges, $15,000 a month.
A one-time new plant investment in the amount of $95,000 is expected to be incurred and paid in June.
Income tax payments estimated to be around $55,000 will be due in both June and September.
And finally, miscellaneous costs are estimated to be around $10,000 a month.
Cash on hand on March 1 will be around $50,000, and a minimum cash balance of $50,000 shall be on hand at all times.
To receive full credit on this assignment, please show all work, including formulas and calculations used to arrive at the financial values.
Group Project Guidelines
As a group, prepare a monthly cash budget for Cyrus Brown Manufacturing for the 9-month period of March through November.
Use Excel to prepare the monthly cash budget.
Based on your cash budget findings, answer the following questions:
Will the company need any outside financing?
What is the minimum line of credit that CBM will need?
What do you think of CBM’s cash position during the budget period? Do you see any concerns for the company in this regard?
If you were a bank manager, would you want CBM as your client? Why or why not?
It is up to the members of the group to divide the assignment tasks evenly. You will be graded on group participation
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.