item beg end average net sales 124652

inventory 9605 11302 10453.5 COGS 77681

acc receiva 4093 4994 4543.5
acc payabl 4822 5749 5285.5

inventory = COGS 7.43 times

avr. Inventory
inventory = 365 49.12 days
(days' sales in receivainventory turnover
receivable = Net sales 27.44 times
avr. Receivable
receivable = 365 13.30 days
receivable turnover
operating = inventory cycle + receivable cycle
62.42 days
payable tu= COGS 14.70 times
avr. Payable
payable pe= 365 24.83 days
payabe turnover
cash cycle = operating cycle - payable period
37.59 days
immediately Q1 Q2 Q3 Q4 Q5
sales 650 740 875 805 747.5
payment of 195 222 262.5 241.5 224.25
payables period 0

90 days
payment of accounts 195 222 262.5 241.5
60 days
payment of accounts 204 235.5 255.5 235.75
 Q1 Q2 Q3 Q4
sales 1640 1920 2215 2355 2050
1230 1440 1661.25 1766.25 1537.5
payment of accounts 1300 1513.75 1696.25 1690
wages, taxes, other expenses 492 576 664.5 706.5
long-term financing expenses 110 110 110 110
total 1902 2199.75 2470.75 2506.5
beg receivables 107000 sales
35% of dec 78100 223142.8571 (b)
15% of nov 28900 192666.6667 (a)

sales budget cash collection from

nov dec jan feb mar
jan 168000 28900 44628.57 109200
feb 186000 33471.43 33600 120900
mar 199000 25200 37200 129350
total cash collections
182728.6
187971.4
191750
 mar apr may jun
credit sales 561000 689000 598000 751000
credit purchases 302000 282000 338000
cash disbursements 4
wages, taxes and expenses 137000 129000 179000
interest 15600 15600 15600
equipment purchases 53500 6600 248000

beg cash balance 182000 264650 434150

cash receipts
cash collections from credit sales 577750 622700 621650
total cash available 759750 887350 1055800
cash disbursements
purchases 289000 302000 282000
wages, taxes and expenses 137000 129000 179000
interest 15600 15600 15600
equipment purchases 53500 6600 248000
total cash disbursement 495100 453200 724600
end cash balance 264650 434150 331200
 Q1 Q2 Q3 Q4 45-day collection period
beg receivables 1,700 1,950 2,350 2,150 cash collection = 1/2 previous month + 1/2 this m
sales 3,900 4,700 4,300 3,600
cash collections 3,650 4,300 4,500 3,950
end receivables 1,950 2,350 2,150 1,800

Q1 Q2 Q3 Q4 60-day collection period

beg receivables 1,700 2,600 3,133 2,867 cash collection = 2/3 previous month + 1/3 this m
sales 3,900 4,700 4,300 3,600
cash collections 3,000 4,167 4,567 4,067
end receivables 2,600 3,133 2,867 2,400

Q1 Q2 Q3 Q4 30-day collection period

beg receivables 1,700 1,300 1,567 1,433 cash collection = 1/3 previous month + 2/3 this m
sales 3,900 4,700 4,300 3,600
cash collections 4,300 4,433 4,433 3,833
end receivables 1,300 1,567 1,433 1,200
previous month + 1/2 this month

previous month + 1/3 this month

previous month + 2/3 this month

borrow 40000000
interest rate 0.53% per month
deposit 4%

EAR (1+i/n)^n - 1
6.78%

actual borrow 15625000 ?*(1-0.04)=15,000,000

intterest pay 500,617.69 deposit 4% borrow
3.20% lose interest may earn from this amount

interest pay 2604223.854

usable funds 38400000
6.78%
borrow 75000000
r 1.54% per quarter
compensating balance 4%
short-term investment inte 0.53% per quarter

a. EAR (1+i/n)^n - 1
2.14%
b. borrow 40,000,000.00
interest costs 2,521,505.01
compensation balance 1,400,000.00
interest on compensating 29,916.79 borrow 40m, 4% of 35m have to be deposit
(or opportunities costs) lose interest you may earn when invest on a short-term investment
total costs 2,551,421.80
EAR 6.38%
c. interest costs 4,727,822
EAR 6.30%
rm investment
 credit sales 724000
inventory period receivable period receivable turnover acc receivables
24.4 38 9.605263 75375.34
operating cycle 62.4
payable period cash cycle
23.9 38.5
payable turnover 15.27197
COGS 445000
acc payable 29138.36
32-day average collection 32/90 58/90
min cash balance 20000000 0.355555556 0.644444
receivables balance 236000000 next quarter this quarter

Q1 Q2 Q3 Q4
beg receivables 236 139 175 212
sales 390 493 595 545
cash collections 487 456 559 563
end receivables 236 139 175 212 194
total cash collections 487 456 559 563
total cash disbursements 321 432 767 463
net cash inflow 166 24 (208) 100
beg cash balance 20 186 211 2
net cash inflow 166 24 (208) 100
end cash balance 20 186 211 2 102
min cash balance 20 20 20 20 20
cumulative surplus (deficit) 166 191 (18) 82
 interest pmt
$ received
repay?
EAR?

borrow $ 400,000,000
interest rate 1.58% per quarter
compansation balance 5% on funds borrow
commitment fee 0.25% line credit amount

a. ignore commitment fee

compensating balance int 6.47%
EAR 6.81%

b. uses $ 210,000,000
interest costs $ 13,589,872.71
actual borrow $ 199,500,000.00
interest rate 6.81%
commitment fee $ 1,000,000.00
usable funds $ 198,500,000.00 (why not including commitment fee)
$ 213,089,872.71
EAR 6.38%
interest rate 7.30%
credit line 20000000
compensating balance 4% borrow amount

actual borrow 19200000

interest costs 1460000
usable funds 17740000
EAR 8.23% (why minus interest costs); annual rate?
because of discount interest loan,
you have to pay interest cost immediately
then the usable fund reduce