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Fin 370 Week 3 Assignment Precision Machines Part 1

  • Date Submitted: 08/06/2016 09:40 PM
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FIN 370 Week 3 Assignment   Precision Machines Part 1
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Precision Machines is preparing a financial plan for the next six months to determine the financial needs of the company. The historical analysis of the company’s sales shows that the company’s total sales are 30% cash sales and 70% credit sales.   Further analysis of credit sales shows that the company receives 50% of the credit sales one month after the sale and the remaining 50% in the second month after the sale. This means the cash collections from sales are 30% in the first month of the sale, 35% in the second month, and 35% in the third month.  

The materials purchased by the company amounts to 50% of the sales for the month.   The company pays for the purchases one month after the initial purchase. The company likes to maintain a cash balance of $5,000. The cost of borrowing is 10%.   The company plans to pay off the loan whenever there is a surplus and borrow when there is a deficit.  

The attached spreadsheet shows revenues (sales), expenses, capital expenditures, and other expenses for Precision Machines’ next six months.   Using the information given on the spreadsheet, prepare a cash budget for January through June and determine the cash surplus, deficit, and the financing needs of the company.  

Review the Learning Team Assignment due in Week 5.

Create an outline for the essay.

Develop a 700-word annotated bibliography using at least 3 resources.

Format your paper consistent with APA guidelines.

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