Nobody downloaded yet

Analysis of monthly cash budget of Cyrus Brown Manufacturing Company - Essay Example

Comments (1) Cite this document
Annex 1 exhibits the projected financial statement of Cyrus Brown Manufacturing Company for 9 months and a Cash Flow Statement. From these statements, we can see the projected progress of sales of CBM for the 9 months period, and readily appreciate the data on its year end…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER95.5% of users find it useful
Analysis of monthly cash budget of Cyrus Brown Manufacturing Company
Read TextPreview

Extract of sample "Analysis of monthly cash budget of Cyrus Brown Manufacturing Company"

Download file to see previous pages We will note from the income statement the net cash inflows from operations during the year after deducting the direct manufacturing costs and indirect expenses. As shown from the FS, the sales forecast for March and April are not sufficient to produce profit for the said months as expenses exceed projected sales. For the month of May, profit will be realized as projected sales have been increased. A substantial loss is seen for the month of June. A brief analysis of the data reveals that the loss is because of an investment made for plant structure and payment of taxes. The biggest sales forecast comes in September; however, it is also coupled with corresponding increase of expenses that includes second installment of payment of taxes; total expenses are 90% of sales. Accordingly, expected profit is reduced. There is a 42% drop in sales in October which is quite significant as it will also considerably affect the projected profit of the company and will reduce the cash receipts for the month. There is no explanation why the forecast of sales has gone down in October and November. TheTaxes have been deducted from the computations so the earnings that are shown in the balance are NET, that is no tax and interest have to be deducted. The net earnings are funds available for other uses like payment of debts or for other investments (Investorwords, n.d.) A projected monthly cash flow statement for March to November is presented for CBM to show the incoming and outgoing cash in the operations of the business. (See Annex 1). A cash flow has been defined as an accounting process that shows the difference of amount of cash in the beginning (opening balance) and the amount at the end of the period (closing balance) (Business, n.d.). Management of cash flows is an important part of the business operations because most often it becomes the source of failure for most businesses. Thus, FindLaw (n.d) contends that when the owner of the business understands the concept of cash management, he is prepared in the unforeseen eventualities in the business because he has a plan. Cash flows may become positive or negative during operations. When it is positive, business is shown to be in a healthy condition, while negative cash outflow shows internal problems in the operations. For CBM, its cash position shows negative cash outflow in the first two months of operations because of poor collection in March and slow growth of sales in March up to April. Cash flows will show the sources of funds used in the operations and how and where the funds are used. For sources of funds CBM provided an opening balance of $50,000 and collections from monthly sales. For March, only 75% of projected sales are expected to be collected. From April to November, 100 percent collection is expected to be collected. Because expenses are more than the funds collected from March to June there is a shortage of funds for this period. Due to this, CBM needs to get outside sources of funds to finance its operations for March, April and June. There is a large cash outflow in June because of a capital investment and payment of taxes in June, after which cash flow becomes positive and profit accrue to the business. The cash on hand provided by CBM is $50,000.00 and it will need additional funds to support its operations. Approximately CBM needs a minimum credit line of $24,500 to draw for its monthly shortage of funds. It is assumed that CBM had provided capital for operations and there is no need to borrow additional funds. Conclusion. A cash flow projection ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Analysis of monthly cash budget of Cyrus Brown Manufacturing Company Essay”, n.d.)
Retrieved de
(Analysis of Monthly Cash Budget of Cyrus Brown Manufacturing Company Essay)
“Analysis of Monthly Cash Budget of Cyrus Brown Manufacturing Company Essay”, n.d.
  • Cited: 0 times
Comments (1)
Click to create a comment or rate a document
zlindgren added comment 11 months ago
Student rated this paper as
The topic of "Analysis of monthly cash budget of Cyrus Brown Manufacturing Company." is quite popular among the tasks in college. Still, this text opens a new perspective of seeing the problem. I’ll use the idea for my own research.

CHECK THESE SAMPLES OF Analysis of monthly cash budget of Cyrus Brown Manufacturing Company

Should Media Respect Privacy of Political Figures

3 Pages(750 words)Essay

Manufacturing Budget Analysis

...? Manufacturing Budget Analysis Problems in budgetary control system of Ferguson & Son Manufacturing Company and its Impacts A Budgetary Control System (BCS) is a financial technique that helps in controlling and evaluating income as well as expenditure, supervising the demands for cash and borrowings (Scribd Inc, 2012). The overall case study describes the conversation that took place between Tom Emory, the manager of machine shop and Jim Morris, the manager of the division of equipment maintenance of Ferguson & Son Manufacturing Company. Initially, it was observed that the degree of efficiency was...
5 Pages(1250 words)Assignment

Case Analysis-Milton Manufacturing Company

.... The first financial problem that the company faces is that its revenues decreased by 10% in comparison with the previous year. Lower sales results hurt the bottom line of the company by lowering its profitability. Another issue with lower sales is that it can deplete the cash reserves of a firm. A second accounting issue was that the capital expenditures of the company were increasing at a rate of 26%. A third accounting issue Milton Manufacturing Company faced was a reduction in its cash flow position. Cash is the most important assets a company holds because it is used to pay for the...
5 Pages(1250 words)Case Study

National cash Register Company

...?Briefing a Case Example Case Number: NCR CORP. V. KORALA ASSOCIATES, LTD (CASE 3 FACTS: National cash Register Company (NCR)was founded by John H Patterson in the year 1884. Currently, NCR is regarded as a global supplier of automated teller machines (ATMs), integrated hardware along with software systems, related maintenance and support services. It can be viewed that over 300000 NCR ATMs are installed throughout the globe. In order to upgrade ATM’s security, NCR created a software solution to implement in all of its ATM machines. At the same time, Korala Associates Ltd. (KAL) argued to have created a comparable security up-gradation for NCR’s ATMs. For developing such software, KAL has entered into...
5 Pages(1250 words)Essay

Company analysis : N Brown Group plc

...? N BROWN GROUP PLC N Brown Group plc analysis Based in Manchester within England, ‘N Brown Group plc’ is among major leading British home shopping retailers and its operations are under different names such as the Jacamo, JD Williams, SimplyBe as well as ‘High and Mighty’. Besides clothing, the company deals with footwear, reliability, electrical goods, household goods as well as commercial services across UK1. Williams David became the founding person to the group as he operated mobile outlets in UK2 in the 19th century, 1859. Over year, different shareholders and directors took over the management of the company and this explains the...
4 Pages(1000 words)Essay

Financing needs of Cyrus Brown

...B. In order to make reasonable estimates about financing needs of Cyrus Brown Manufacturing (CBM), an insight into the cash inflows and outflows within the given period (March till November, 2004) is needed. As it is evident from the schedule, the company will not need any outside financing. The total cash inflow for the period is positive. The only three months when the inflow is negative are March, April, and June. However, the remaining six months compensate for the resulting cash shortage. It should be further noted, that depreciation expense was excluded from the cash inflow/outflow...
2 Pages(500 words)Essay

Cyrus Brown Manufacturing Cash Budget and Forecasting

...CBM CASH BUDGET b. Based on your findings in part b, will the company need any outside financing From the above cash budget the company will need out side financing c. What is the minimum line of credit that CBM will need The company will need minimum credit line of $693750 for 7 months d. What do you think of CBM's cash position during the budget period Do you see any concerns for the company in this regard from the above cash budget we have seen that the company has some concerns about cash...
3 Pages(750 words)Essay

The Cash Flow Budget of Hidetoseek Company

...The Cash Flow Budget of Hidetoseek Company Table of Contents Table of Contents 1 Task 1 2 Task 2 4 Task 3 5 Task 4 6 Task 5 7 Bibliography 8 Task 1 Cash budget for the period of six months ending on November 30, 2010 Particulars June July August September October November Opening Balance (4,500.00) (9,754.60) (36,788.23) (23,232.09) (10,592.23) 1,117.77 Sales 18,500.00 16,500.00 18,000.00 17,000.00 20,000.00 18,000.00   14,000.00 6,745.40 (18,788.23) (6,232.09) 9,407.77 19,117.77               Purchase 12,400.00 35,000.00... : Hidetoseek increase its...
4 Pages(1000 words)Assignment

Research paper

7 Pages(1750 words)Essay

Cash wise company

...Teacher Study of Financial Ratios from an Investor’s Viewpoint Return on an investment, especially, in the stock market is associated with risk. It is no wonder that even novice investors try to understand the financial health of the company before purchasing its stock. As a rule of thumb, investors look at company’s financial statements before making an investment decision. However, information on the income statement, balance sheet and cash flow statement hardly provide sufficient evidence of the company’s financial health. In addition to financial statements, educated investors fall back upon the values of financial ratios. This assignment presents the results and...
4 Pages(1000 words)Term Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Analysis of monthly cash budget of Cyrus Brown Manufacturing Company for FREE!

Contact Us