Based on the following Actuals and Projections construct aQ2& Q3Cash Flow Forecastand determine the liquidity ratios for XYZ Corp to see if they areimproving or declining quarter over quarter.Calculate theQ2and Q3 Current Ratio, Quick Ratio,and Cash Ratios?

Sales

Jan Actual $2,675,000.00

Feb Actual $2,430,000.00

March Actual $2,850,000.00

Apr Forecast $2,700,000.00

May Forecast $3,200,000.00

June Forecast $3,500,000.00

July Forecast $3,750,000.00

August Forecast $3,400,000.00

September Forecast $2,900,000.00

Purchases

Jan Actual $1850000

Feb Actual $2,550,000.00

March Actual $2,100,000.00

Apr Forecast $2,250,000.00

May Forecast $2,500,000.00

June Forecast $2,750,000.00

July Forecast $3,000,000.00

August Forecast $2,250,000.00

September Forecast $2,000,000.00

Given this additional information:

• The firm collects 40% of sales in cash, 40% of its sales one month later, and 20% 2 months later (treat this as AR)
• Interest income of $90,000 on treasuries is realized at the end of each quarter (from Long Term,not Current Assets)
• The firm pays cash for 50% of its purchases and 50% the following month (consider this AP)
• In addition to AP, the firm carries $1 million in Current Liabilities
• Salaries and wages amount to 16.5 percent of the preceding month's sales.
• Sales commissions amount to 5 percent of the preceding month's sales.
• Lease payments of $75,000 must be made each month (Capital Lease Payments,not Current Liabilities).
• A principal and interest payment on an outstanding loan is due quarterly (EOQ) of $100,000.
• The firm has a beginning cash balance in April of $1,500,000
• Q2 Ending Inventory is 1,405,000 and Q3 Ending Inventory is $1,745,000