Cyrus Brown Manufacturing (CBM) - 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) - 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

2-page Excel Spreadsheet (show all work)

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 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.

please show all work, including formulas and calculations used to arrive at the financial values.

 

SOLUTION PREVIEW (The Solution is done in EXCEL SHEET)

a.

Cash Budget

Particulars	March	April	May	June	July	August	September	October	November
Receipts:
25% of current month's sales	25000	68750	80000	112500	175000	175000	206250	125000	28750

 

File name: Cyrus-Brown-Manufacturing-CBM.xls File type: application/vnd.ms-excel Price: $12