o 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:
He has also gathered the following collection estimates regarding the forecast sales:
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:
Additional financial information is as follows:
To receive full credit on this assignment, please show all work, including formulas and calculations used to arrive at the financial values.
Group Project Guidelines:
Today we will discuss Cyrus Brown Manufacturing (CBM) in order to determine whether outside financing will be required. In order to determine such, we will review the cash flow statement for the last nine months, March through November. Although the company has not actively been in business for an extended amount of time, the nine month timeframe should suffice and provide the required information. In order to do this we will be looking at how much cash has come in and out over the last nine months.
The cash flow statement is one of the few most important documents because it provides detailed information of the financial activities of the business: received payments (cash inflow) and business expenses (cash outflow). Although the profit and loss statement is helpful because it provides the overall profits over a certain amount of time, it does not give as much information as a cash flow statement such as:
· Detailed distributions (Silven-Hoell)