Cash Budgets
A cash budget helps an organization plan and control the movement of cash into and out of the company. It is important for an organization to have a good understanding of its cash needs in order to identify instances of cash idleness or shortage. Cash on hand allows the organization to make commitments to various stakeholders, including employees and suppliers. Idle cash represents missed opportunities to reinvest into the organization and to return value to shareholders.
In this Application, you will use the information on cash budgets outlined in the Resources to prepare a cash budget for Gladiator Robotics given the data provided in the scenario below.
You will create and use an Excel spreadsheet for your calculations for the problems below, and the spreadsheet you develop is what you submit for the Application. Note: The Resources section includes tutorials for those who might need help in designing and using an Excel spreadsheet.
Gladiator Robotics
Read the information below and complete Parts I, II and III
The board of directors of Gladiator Robotics is considering whether or not to donate to a national robotics convention for high school students interested in technology and engineering. The company needs you to prepare a monthly cash budget to determine the available cash reserves for January, February, and March. Relevant data appear below.
| October actual |
November actual |
December actual |
January | February | March | |
|---|---|---|---|---|---|---|
| Sales | $300,000 | $325,000 | $450,000 | $310,000 | $350,000 | $400,000 |
All sales are on account. Collections are expected to be 60% in the month following the sale, 25% in the second month following the sale, and 10% in the third month following the sale. Five percent are deemed to be uncollectible.
The company sold equipment in February for $20,000 and received a dividend on investments of $4,000 in March.
Cash on hand as of January 1st is $14,000.
Material purchases are as follows:
| October | November | December | January | February | March |
|---|---|---|---|---|---|
| $80,000 | $85,000 | $105,000 | $80,000 | $88,000 | $92,000 |
Material purchases are paid 50% in the month purchased and the remainder in the following month.
Other disbursements are paid in the month incurred.
| January | February | March | |
|---|---|---|---|
| Labor and wages | 150,000 | 185,000 | 215,000 |
| Selling costs | 62,000 | 68,000 | 78,000 |
| G & A costs | 30,000 | 31,000 | 38,000 |
| Income taxes | 32,000 | ||
| Capital equipment | 50,000 |
The company wants to maintain a cash balance at the end of each month of at least $10,000. It has a $250,000 line of credit at the bank and will borrow from the bank in order to maintain this balance.
Part I: Prepare a monthly cash budget for January, February, and March following the template that is provided to complete.
Part II: Analyze the cash budget and make recommendations to the board of directors of Gladiator Robotics regarding your findings. Be specific regarding possible causes and remedies (if applicable).
Part III: What if any concerns do you have about the ability to make the donation? Also, do you have any concerns about cash on hand which might impact variable HR expenses such as recruitment costs or other commitments to employees including staffing, development or rewards? Be specific.
Submit this document by Day 7.
At 111papers.com, we value all our customers, and for that, always strive to ensure that we deliver the best top-quality content that we can. All the processes, from writing, formatting, editing, and submission is 100% original and detail-oriented. With us, you are, therefore, always guaranteed quality work by certified and experienced writing professionals. We take pride in the university homework help services that we provide our customers.
As the best homework help service in the world, 111 Papers ensures that all customers are completely satisfied with the finished product before disbursing payment. You are not obligated to pay for the final product if you aren’t 100% satisfied with the paper. We also provide a money-back guarantee if you don’t feel that your paper was written to your satisfaction. This guarantee is totally transparent and follows all the terms and conditions set by the company.
Read moreAll products that we deliver are guaranteed to be 100% original. We check for unoriginality on all orders delivered by our writers using the most advanced anti-plagiarism programs in the market. We, therefore, guarantee that all products that we submit to you are 100% original. We have a zero-tolerance policy for copied content. Thanks to our strict no plagiarized work rule, you can submit your homework to your professor without worrying.
Read moreTThis is one of the most cherished courtesy services that we provide to help ensure that our customers are completely satisfied with our finished products. Delivering the best final product to our customers takes multiple inputs. 111papers.com prides itself on delivering the best university homework help services in the writing industry. And, in part, our free revision policy is how we do it. What’s more, all our revisions are 100% free without any strings attached.
Read moreClient privacy is important to use. We know and understand just how important customers value their privacy and always want to safeguard their personal information. Thus, all the information that you share with us will always remain in safe custody. We will never disclose your personal information to any third party or sell your details to anyone. 111 Papers uses the most sophisticated, top-of-the-line security programs to ensure that our customers’ information is safe and secured.
Read morePlacing your order with us means that you agree with the homework help service we provide. We, in turn, will endear to ensure that we do everything we can to deliver the most comprehensive finished product as per your requirements. We will also count on your cooperation to help us deliver on this mandate. Yes, we also need you to ensure that you have the highest-quality paper.
Read more