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Pursuant to the request of Mr. Cyrus Brown we have prepared a monthly cash budget for the nine month period, March through November. Illustrated below are our findings.
March | April | May | June | July | August | September | October | November | |
SALES | $250,000.00 | $275,000.00 | $320,000.00 | $450,000.00 | $575,000.00 | $700,000.00 | $825,000.00 | $350,000.00 | $285,000.00 |
COLLECTION OF A/R 10% | $25,000.00 | $27,500.00 | $32,000.00 | $45,000.00 | $57,500.00 | $70,000.00 | $82,500.00 | $35,000.00 | $28,500.00 |
MONTH FOLLOWING (65%) | $162,500.00 | $178,750.00 | $208,000.00 | $292,500.00 | $373,750.00 | $455,000.00 | $536,250.00 | $227,500.00 | |
SECOND MONTH FOLLOWING 25% | $62,500.00 | $68,750.00 | $80,000.00 | $112,500.00 | $143,750.00 | $175,000.00 | $206,250.00 | ||
TOTAL CASH RECEIPTS | $25,000.00 | $190,000.00 | $273,250.00 | $321,750.00 | $430,000.00 | $556,250.00 | $681,250.00 | $746,250.00 | $462,250.00 |
COST OF MATERIALS | -$187,500.00 | -$206,250.00 | -$240,000.00 | -$337,500.00 | -$431,250.00 | -$525,000.00 | -$618,750.00 | -$262,500.00 | |
RENT PAYMENTS | -$15,000.00 | -$15,000.00 | -$15,000.00 | -$15,000.00 | -$15,000.00 | -$15,000.00 | -$15,000.00 | -$15,000.00 | -$15,000.00 |
WAGES AND SALARIES | -$35,000.00 | -$35,000.00 | -$35,000.00 | -$35,000.00 | -$35,000.00 | -$35,000.00 | -$35,000.00 | -$35,000.00 | -$35,000.00 |
TAX PAYMENTS | -$55,000.00 | -$55,000.00 | |||||||
FIXED ASSET OUTLAYS | -$95,000.00 | ||||||||
MISC EXPENSES | -$10,000.00 | -$10,000.00 | -$10,000.00 | -$10,000.00 | -$10,000.00 | -$10,000.00 | -$10,000.00 | -$10,000.00 | -$10,000.00 |
TOTAL CASH DISBURSEMENTS | -$60,000.00 | -$247,500.00 | -$266,250.00 | -$450,000.00 | -$397,500.00 | -$491,250.00 | -$640,000.00 | -$678,750.00 | -$322,500.00 |
NET CASH FLOW | -$35,000.00 | -$57,500.00 | $7,000.00 | -$128,250.00 | $32,500.00 | $65,000.00 | $41,250.00 | $67,500.00 | $139,750.00 |
ADD:BEGINNING CASH | $50,000.00 | ||||||||
ENDING CASH | $15,000.00 | -$57,500.00 | $7,000.00 | -$128,250.00 | $32,500.00 | $65,000.00 | $41,250.00 | $67,500.00 | $139,750.00 |
LESS:MINIMUM CASH BALANCE | -$50,000.00 | -$50,000.00 | -$50,000.00 | -$50,000.00 | -$50,000.00 | -$50,000.00 | -$50,000.00 | -$50,000.00 | -$50,000.00 |
REQUIRED TOTAL FINANCING | $35,000.00 | $107,500.00 | $43,000.00 | $178,250.00 | $17,500.00 | $0.00 | $8,750.00 | $0.00 | $0.00 |
EXCESS CASH BALANCE | $15,000.00 | $67,500.00 | $139,750.00 |
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To decide if the company will need outside financing you need to look closely at the cash budget.
Startup financing cycle
English: A graph showing the total financing of th...
English: A graph comparing the percentage of total...Potential creditors use this to ascertain viability. From the Cash Budget we can see that CBM will need financing for the first five months and then additional financing in September. The cash budget tells us if there is a cash shortage or a cash excess at the end of each month. This is based on the set minimum requirement of cash balance. From March to...