Short Term Financial Management


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    Short Term Financial Management
    Paper details:
    See Assignment details
    Week 5 Group Project
    Assignment Description
    Please read the relevant parts of your textbook, which refer to cash flow and financial planning.
    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
    one­time 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 fullÕÉ≠†Њ† 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 9­month period of March
    through November.
    oUse Excel to prepare the monthly cash budget.
    Based
    on your cash budget findings, answer the following questions:
    oWill the company need any outside financing?
    oWhat is the minimum line of credit that CBM will need?
    oWhat do you think of CBM’s cash position during the budget period? Do you see any concerns for the company
    in this regard?
    oIf 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


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      Short-Term Financial ManagementPlease read the relevant parts of your textbook, which refer to cash flow and financial planning.
      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.

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