Criteria:

One Excel file submitted.

All calculations completed using Excel formula functions

Prepare a comprehensive cash budget: (file is attached)

Use the format as your guide: (format is attached)

Check figures: Cash receipts (collections) balance Aug: $20,500; Cash disbursements (all expenses) July $20,400

In addition to the preparation of the three month cash budget, provide the following descriptive analysis by addressing each of the following items fully:

1. Does the cash budget based on the given parameters provide the firm with the liquidity in needs in meeting operations for the quarter (and why)?

2.The CFO wants to know what is the impact of increasing the minimum monthly balance to $7,000. Provide a short but detailed response to the CFO on the impact of this change. Or course the CFO will expect to see the numerical values that support the response.

3 What is the impact of interest rate changes on the a) the budget as proposed, and b) the CFOs request for higher minimum cash balance?

y .c .d o m w o o c u -tr a c k w w .d o C lic k to bu y bu to k lic C w w w N O W ! h a n g e Vi e N PD ! XC er O W F- w m h a n g e Vi e w PD XC er F- c u -tr a c k .c Cash budget a) Cash collections schedule: May Sales Cash Credit June July Aug Sept 30% 70% A/R schedule From credit sales: May June July Aug Sept Total credit collections Cash sales Total cash collected: $ $ $ - $ - $ $ $ $ $ - $ - $ - $ - $ - $ $ - $ - $ - $ - b) purchases and payments budget + - Payments Beginning inventory Purchases Ending inventory COGS From: June July Aug Sept Total merchandise payments: c) Monthly Cash Budget $6,000 $0 $0 $0 $6,000 July $0 $0 $0 $0 Aug Sept Beginning cash balance: Short-term bank financing principal: Cash Collections: Total cash available Disbursements Payments for merchandise Expenses Equipment note Disbursements: subtotal Financing $0 $0 $0 $0 $0 $0 Short-term principal repayment Interest expense Total disbursements $0 $0 $0 $0 Ending cash balance $0 $0 $0 Total quarterly financing: Total quarterly interest expense July principal: Aug principal: $0 $0 $0