Cash Budget Exercises

Financial Management

1)
A firm's projected cash receipts

June July August

Sales forecast ₱65,000 ₱70,000 ₱85,000
Cash sales (60%) ₱39,000 ₱42,000 ₱51,000
Collection of AR
Credit (20%) ₱13,000
Credit (20%) ₱14,000
Total cash receipts ₱39,000 ₱42,000 ₱78,000

2)
Total Corp. Projected Cash Disbursement

January February March

Purchases (70% x sales of the following month) ₱378,000 ₱385,000 ₱420,000
Cash purchases (50% of purchases) ₱189,000 ₱192,500 ₱210,000
Payment of AP
After 1 month (30%) ₱113,400 ₱115,500
After 2 months (20%) ₱75,600
Rent ₱9,500 ₱9,500 ₱9,500
Wages ₱41,300 ₱42,600 ₱43,250
Taxes
Fixed assets ₱85,000
Interest ₱32,000
Cash dividends
Total cash disbursements ₱239,800 ₱358,000 ₱570,850

3)
Requirement 1: Shazam Cash Budget
Schedule of Cash Receipts (000)
February March April
Sales forecast ₱500 ₱600 ₱400
Cash sales (30%) ₱150 ₱180 ₱120
Collection of AR
After 1 month (70% x 70% = 49%) ₱245 ₱294
After 2 months (30% x 70% = 21%) ₱105
Total cash receipts ₱150 ₱425 ₱519

Cash Budget (000)

April May June
Cash receipts ₱519 ₱382 ₱242
Less: Cash disbursements -₱600 -₱500 -₱200
Net cash flow -₱81 -₱118 ₱42
Add: Beginning cash ₱115 ₱34 -₱84
Ending cash ₱34 -₱84 -₱42
Less: Minimum cash balance -₱25 -₱25 -₱25
Required total financing ₱109 ₱67
Excess cash balance ₱9

4)

April Sales Receivables related to April / % of collection

₱21,000
April Sales 14%

April Sales ₱150,000 Letter A

5)

For the month of October

Total cash receipts ₱1,000,000
Less: Cash disbursements -₱1,090,000 Letter A
Net cash flow -₱90,000
Add: Beginning cash (50,000 + 70,000 borrowed cash) ₱120,000
Ending Cash ₱30,000
September October
₱92,000 ₱95,750
₱55,200 ₱57,450

₱14,000 ₱17,000
₱17,000 ₱18,400
₱86,200 ₱92,850

April May
₱462,000 ₱469,000
₱231,000 ₱234,500

₱126,000 ₱138,600
₱77,000 ₱84,000
₱9,500 ₱9,500
₱46,500 ₱50,400
₱57,500

₱15,000
₱505,000 ₱574,500

May June
₱200 ₱200
₱60 ₱60

₱196 ₱98
₱126 ₱84
₱382 ₱242
Requirement 2: Required total financing