User Account

All Pages

cash budget, Corporate Finance

Assignment Help:
You have been asked to prepare a cash budget for Whitborrow plc for the next three months, October, November and December. The Managers are concerned that they may not have sufficient cash to pay for a £150,000 investment in equipment in December. The overdraft has reached its limit £70,000 at the present time - the end of September. Sales during September were a total of £400,000 of which £55,000 was received in cash. £165,000 is expected to be paid on October, with the remainder likely to flow in during November. Sales for the next three months are as follows:

Total sales Cash sales Credit sales

October 450,000 90,000 360,000

November 550,000 110,000 440,000

December 700,000 140,000 560,000

There is a gross profit margin of 40 percent on sales. All cost (materials, labour and other) are paid for on receipt. Only 20 percent of customer sales are expected to be paid for in the month f delivery. A further 70 percent will be paid after one month and the remainder after two months. Labour and other costs amount to 10 percent of sales. Debtor levels at the end of September are £400,000 and the investment in stock is £350,000

Required:

a. Prepare a cash budget for October, November and December, and state if the firm will be able to purchase the new equipment.

b. Recommend action that could be taken to improve the working capital position of Whitborrow.

Related Discussions:- cash budget

Abu dhabi investment authority - adia, ADIA is a government-owned investmen...

ADIA is a government-owned investment organization that administers the sovereign wealth fund for Abu Dhabi, United Arab Emirates. As per the Sovereign Wealth Fund Institute's rank

Accumulated earnings and profits, This is an accounting term which is appli...

This is an accounting term which is applicable to stockholders of closely going businesses. Accumulated earnings and profits are a company's net profits after subtracting distribut

Determine the tax loss on the sale, Jackson Corporation prepared the follow...

Jackson Corporation prepared the following book income statement for its year ended December 31, 2011: Sales

Explain how transactions in the queue are managed, Question: (a) The Ma...

Question: (a) The Mauritius Automated Clearing and Settlement System (MACSS) is the Mauritian Real-time Gross Settlement (RTGS) system. (i) Define the term gross settlement

What is the repo rate, Problem: (a) What are the main functions of the...

Problem: (a) What are the main functions of the Bank of Mauritius? Give short comments on each function. (b) The Repo rate is an instrument of monetary policy for the Bank

455454, hjdvasfhfh

hjdvasfhfh

Financial Ratios, I do not understand how ratios are calculated on MSN Mone...

I do not understand how ratios are calculated on MSN Money website. My homework assignment was to look up GM''s income statement and balance sheet for the last quarter and compare

Calculate the annual economic value added, Westbrook Inc. is financed with ...

Westbrook Inc. is financed with debt that costs it 5% (pre-tax)or $12.5m annually and expects to generate an EBITof $50m per year perpetually. The company is at its target debt/eq

Chapter 9 solution, Ask question #solution of question to discuss 4

Ask question #solution of question to discuss 4

Designing capital structure, whaatis the components of capital structure

whaatis the components of capital structure

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd