1

Development of Exercises, Chapter 6 Cash Budget - Projection of

cash flow

Authors:
Alejandra Almendra Duque
Eleidys Margarita Rodriguez
Estefanía Erazo Lopez
Maria Alejandra Muñoz

Program in Occupational Safety and Health Management

Faculty of Business Sciences, Minuto de Dios University Corporation
NRC 1501: Budgets
Carlos Alfonso Monsalve
March 21, 2023
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Content
Case Development. 4
Bibliografía ...........................................................................................................................38

Table of Tables

Table 1 Sales Forecast. 4

Table 2 Annual Sales Forecast....................................................................................... 5
Table 3 Relevant Data. 6
Table 4 Cash Flow Product1...................................................................................... 6
Table 5 Cash Flow Product1 ...................................................................................... 7
Table 6 Cash Flow Product 2
Table 7 Cash Flow Product 2......................................................................................8
Table 8 Cash Flow Product 3
Table 9 Cash Flow Product 3. 9
Table 10 Cash Flow Product 3. 9
Table 11 Cash Flow Product 3 .................................................................................. 10
Table 12 Annual Cash Flow Budget......................................................... 10
Table 13 Global Cash Flowl ..........................................................................................11
Table 14 Global Cash Flowl ......................................................................................... 12
Table 15 Inputs by Product ............................................................................................ 13
Table 16 Hours per Workero ................................................................................................ 13
Table 17 Sales Forecast in Units......................................................................... 14
Table 18 Monthly Inventories P1 ...................................................................................... 15
Table 19 Monthly Inventories P2................................................................. 15
Table 20 Monthly Inventories P3 ..................................................................................... 16
Table 21 Monthly Inventories P4...................................................................................... 16
Table 22 Production Budget in Unitss ...............................................................17
Table 23 Labor Cost in Hours - Operatoro ............................................... 18
Table 24 Consumption by Product.................................................................20
Table 25 Inventories.......................................................20
Table 26 Dividends to be Recognized .................................................................................... 21
Table 27 Input Costs. 23
Table 28 Monthly Payment Plan. 24
Table 29 Monthly Cash Budget.26
Table 30 Cash Outflow Statements................................................................................... 27
Table 31 Investment and Cash Flow.29
Table 32 Financing Policies and Cash Flowso .30
Table 33 Adjusted cash budget. Values in millions of pesos ......................... 32
Table 34 Costs and Expensess ...................................................................................................... 32
Table 35 Administrative Expenses. 33
Table 36 Operational Costss .................................................................................................. 34
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Table 37 Annual Budget Financial Concepts ........................................................... 35

Table 38 Monthly Budget Financial Concepts. 36
Table 39 Investment Alternatives Costs and Expenses
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Case Development

1. The company Maderas del Ariari, S. A., assembles four types of products: P1, P2, P3, and P4. Market research

allow us to deduce the following price and quantity forecasts for commercialization for the next year:

Table 1 Sales Forecast

Prices Monthly sales forecast

Products
S1 S2 Ene Feb Mar Abril Mayo Junio Julio Agos. Sept. Oct. Nov. Dic.
P1 24.200 27.800 30 30 15 15 15 30 30 15 15 15 45 45
P2 14,500 16.700 42 42 21 21 21 42 42 21 21 21 63 63
P3 41.300 47.500 64 64 32 32 32 64 64 32 32 32 96 96
P4 30.200 34.800 24 24 12 12 12 24 24 12 12 12 36 36
First Semester

S2: Second Semester

If historical records show that 70% of sales are collected in the same month of the sale, 20% in the following month after the sale.

sales, and 10% in the second month following the sale, plan the cash inflows from sales and accounts receivable.

corresponding to each product, and to the global businesses.

Burbano Ruiz, J. E. (2011)

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In order to calculate the annual budget forecast, we must take into account two variables, the value of the first semester.

and the value of the second semester (S2), multiplied by the quantity of products forecasted to sell per month according to your

classification (P1, P2, P3, and P4) resulting in the total value of the monthly sale. We then proceed to sum the

monthly budget obtaining the projected annual budget for selling and marketing the different products in the

next year with a value of $50,921,800 million pesos in 12 months.

Table 2 Annual Sales Forecast

Prices Monthly sales forecast

Products
S1 S2 January February March April May June
P1 $ 24.200 $ 27.800 $ 726.000 $ 726.000 $ 363.000 $ 363.000 $ 363.000 $726,000
P2 $ 14.500 $ 16.700 $ 609.000 $ 609.000 $ 304.500 $304,500 $ 304.500 $ 609.000
P3 $ 41,300 $ 47.500 $2,643,200 $ 2.643.200 $ 1.321.600 $1,321,600 $1,321,600 $ 2.643.200
P4 $ 30.200 $ 34.800 $ 724.800 $ 724.800 $ 362.400 $ 362.400 $362,400 $ 724.800
Monthly budget $ 4.703.000 $ 4.703.000 $ 2.351.500 $ 2.351.500 $ 2.351.500 $ 4.703.000

Prices Monthly sales forecast Forecast

Products
S1 S2 Julio August September October November December Annual
P1 24,200 $ 27.800 $ 834.000 $ 417.000 $ 417.000 $ 417.000 $ 1.251.000 $ 1.251.000
P2 $ 14.500 $ 16.700 $ 701.400 $ 350.700 $ 350.700 $ 350.700 $1,052,100 $1,052,100
$ 50.921.800
P3 $41,300 $ 47,500 3,040,000 $ 1.520.000 $1,520,000 $1,520,000 4,560,000 $4,560,000
P4 $ 30.200 $34,800 $ 835.200 $ 417,600 $ 417.600 $ 417.600 $1,252,800 1,252,800
Monthly budget $ 5.410.600 $ 2.705.300 $ 2.705.300 $ 2.705.300 $ 8.115.900 $ 8.115.900
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Subsequently, we calculate the cash flow value by product, classified as P1, P2, P3, and P4 based on the sales value.

Monthly calculations for each of the 12 forecasted annual months in the previous table, taking into account the records.

historical sales at 70%, the percentage of the next month's sale will be 20% and the sale of the second month following the sale with

a 10% increase

Table 3 Relevant Data

Relevant Data
Historical records show 70%
Next month for sale 20%
Second month following the sale 10%

Table 4 Cash Flow Product 1

Cash flow product 1

Product 1 Enero February March April May June Julio
70% $ 508.200 $ 508.200 $ 254.100 $ 254.100 $ 254.100 $ 508.200 $ 583.800
20% $ 145.200 $ 145,200 $ 72.600 $ 72.600 $ 72.600 $ 145.200
10% $ 72.600 $ 72,600 $ 36.300 $ 36.300 $ 36.300

Total $ 508.200 $ 653.400 $ 471.900 $ 399.300 $ 363.000 $ 617.100 $ 765.300

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Table 5 Cash Flow Product 1

Cash flow product 1

Budget
Product 1 August September October November December
cash flow
70% $ 291.900 $ 291.900 $ 291.900 $ 875.700 $ 875.700
20% $ 166.800 $ 83,400 $ 83.400 $ 83.400 $ 250.200
10% $ 72,600 $ 83.400 $ 41.700 $ 41.700 $ 41.700
$ 7,353,600
$
Total $ 531.300 $ 458.700 $ 417.000 $1,167,600
1,000,800

The final projected cash flow budget for the sale and marketing of product number 1 should be

$7,353,600 million pesos annually.

Table 6 Cash Flow Product 2

Cash flow product 2

Product 2
January February March April May June July
70% $ 426.300 $ 426,300 $ 213.150 $ 213.150 $ 213.150 $ 426.300 $ 490.980
20% $ 121.800 $ 121,800 $ 60.900 $ 60.900 $ 60.900 $ 121.800
10% $ 60.900 $ 60.900 $ 30.450 $ 30.450 $ 30.450

Total$ 426.300 $ 548.100 $ 395.850 $ 334.950 $ $304,500 517.650 $ 643.230

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Table 7 Cash Flow Product 2

Cash flow product 2

Product 2 Budget
September October November December
cash flow
70% $ 245.490 $ 245.490 $ 736.470 $ 736.470
20% $ 70.140 $ 70.140 $ 70.140 $ 210.420
10% $ 70.140 $ 35.070 $ 35.070 $ 35.070
$ 5.751.060
Total$ 385.770 $ 350.700 $ 841.680 $ 981.960

The final budget of projected cash flow for the sale and marketing of product number 2 shall be

$5,751,060 million pesos annually.

Table 8 Cash Flow Product 3

Cash flow product 3

Product 3
January February March April May June Julio
70% $ 1.850.240 $ 1.850.240 $ 925.120 $ 925.120 $ $925.120 1.850.240 $ 2.128.000
20% $ $528,640 528.640 $ 264,320 $ 264.320 $ 264.320 $ 528.640
10% $ 264.320 $ 264.320 $ 132.160 $ 132.160 $ 132.160
$
Total$ 1.850.240 $ 1.718.080 $ 1.453.760 $ 1.321.600 $ 2.246.720 $ 2.788.800
2.378.880
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Table 9 Cash Flow Product 3

Cash flow product 3

Product 3 Budget flow
August September October November December
cash
70% $1,064,000 $ 1.064.000 $ 1.064.000 $ 3.192.000 $3,192,000
20% $ 608,000 $ 304,000 $ 304,000 $ 304,000 $ 912,000
10% $ 264.320 $ 304.000 $ 152,000 $ 152,000 $ 152,000 $ 26,790,400
Total$ 1.936.320 $1,672,000 $1,520,000 $ 3.648.000 $ 4.256.000

The final forecast cash flow budget for the sale and marketing of product number 3 should be

$26,790,400 million pesos annually, showing an increase in cash flow.

Table 10 Cash Flow Product 3

Cash flow product 4

Product 4
January February March April May June July
70% $ 507.360 $ 507.360 $ 253.680 $ 253.680 $ 253.680 $ 507.360 $ 584.640
20% $ 144.960 $ 144.960 $ 72.480 $ 72.480 $ 72,480 $ 144.960
10% $ 72.480 $ 72.480 $ 36.240 $ 36.240 $ 36.240
Total $ 507.360 $ 652.320 $ 471.120 $ 398.640 $ 362.400 $ 616.080 $ 765.840
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Table 11 Cash Flow Product 3

Cash flow product 4

Product 4 Budget
August September October November December
cash flow
70% $ 292.320 $ 292.320 $ 292.320 $ 876.960 $ 876.960
20% $ 167.040 $ 83.520 $ 83.520 $ 83.520 $ 250.560
10% $ 72,480 $ 83.520 $ 41.760 $ 41.760 $ 41.760
$ 6,846,720
Total $ 531.840 $ 459.360 $ 417.600 $ 1.002.240 $ 1.169.280

The final budget of projected cash flow for the sale and marketing of product number 4 should be

$6,846,720 thousand pesos annually, showing an increase in cash flow.

Subsequently, the value of the Annual Cash Flow Budget is obtained by summing the total amount of each of the

values obtained previously resulting in $46,741,780 million pesos annually.

Table 12 Annual Cash Flow Budget

Budget Flow
Product 1 Product 2 Product 3 Product 4
Annual Effective

$ 7.353.600 $ 5.751.060 $ 26.790.400 $ 6.846.720$ 46.741.780

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Finally, the calculation of the Global Cash Flow is carried out in order to obtain the annual global flow, summing each one.

from the previously obtained values by month and by product, adding the total of the months and obtaining an annual total of flow

of global cash amounting to $47,675,440 million pesos over 12 months. To obtain the exact data on cash flow of

counted at 70%, only the values obtained in those cells for all four products are added together to obtain the values.

the credit should be subtracted from the global budget of $47,675,440 minus the $35,645,260 in cash, resulting in a total of

$12.030.180millones de pesos de ventas a crédito y$35.645.260millones de pesos de ventas de contado.

Table 13 Global Cash Flow

Global cash flow

Product 4
January February March April May June July
70% counted $ 3.292.100 $ 3.292.100 $ 1.646.050 $ 1.646.050 $ 1.646.050 $ 3,292,100 $3,787,420
1 month 20% $ - $ 940.600 $ 940.600 $ 470.300 $ 470.300 $ 470.300 $ 940.600
2 months 10% $ - $ - $ 470.300 $ 470.300 $ 235.150 $ 235.150 $ 235.150

Total$ 3.292.100 $ 4.232.700 $ 3.056.950 $ 2.586.650 $ 2.351.500 $ 3.997.550 $ 4.963.170

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Table 14 Global Cash Flow

Product 4 Global budget

August September October Noviembre Diciembre

70% paid $ 1.893.710 $ 1.893.710 $ 1.893.710 $ 5.681.130 $ 5.681.130

Of
$ 35.645.260
told
1 month 20% $1,082,120 $ 541.060 $ 541.060 $ 541.060 $ 1.623.180

2 months 10% $ 470.300 $ 541.060 $ 270.530 $ 270.530 $ 270.530 $ 47,675,440

On credit $12,030,180
$ $
Total$ 3.446.130 $2,705,300 $ 7.574.840
2.975.830 6.492.720
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2. The production management of Maderas del Ariari, S.A., considers it appropriate

establish final inventories of finished products that represent 40% of

the planned sales for the following month. In addition, it has the following

information related to product inventories at the beginning of the

planning period and set policies on the inventory of goods

finished by the end of December.

Table 15 Inputs by Product

Products Supplies
Initials Finals
P1 18 16
P2 20 24
P3 30 36
P4 12 16

Based on the data presented, establish the manufacturing schedule for each.

product. Then, considering the following data, calculate the requirements.

budgetary labor.

Burbano Ruiz, J. E. (2011).

R//
Planned sales for the next 40%
month
Estimated cost of the labor hour $ 940

The estimated cost per hour is initially set, which has a value of

$940 pesos and additionally they provide us with an estimate of hours spent on products and

per worker.

Table 16 Hours per Operator Product Hours

P1 6.2
P2 3.7
P3 10.7
P4 7.9
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According to the data mentioned above, the forecast should be calculated.

of sales in units by multiplying the average monthly sales by the number of

months remaining in the year considering 40% of the planned sales of

next month; the total is summed for each month and for the four products giving a

annual projection of 1,600 units forecasted for sale.

Table 17 Sales Forecast in Units

Monthly sales forecast in units

Products
January February March April May June
P1 30 30 15 15 15 30
P2 42 42 21 21 21 42
P3 64 64 32 32 32 64
P4 24 24 12 12 12 24
Total 160 160 80 80 80 160

Pronóstico de ventas mensuales en unidades

Forecast
July August September October November December Sales
Annual
30 15 15 15 45 45
42 21 21 21 63 63
64 32 32 32 96 96 1600
24 12 12 12 36 36
160 80 80 80 240 240
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For the calculation of the initial and final inventories of all four products

(P1, P2, P3, and P4) should multiply the sales forecast in units for the next month

for 40% of the planned sales, it must be taken into account that the value of the

Final inventories calculated will always be the same as the final inventories of the month.

immediately prior.

The sum of the results obtained in the calculation of the initial inventories and

Year-end totals by product show a total inventory for Product 1 of 250.

units.

Table 18 Monthly Inventories P1

Inventarios mensuales
Producto 1
January February March April May June
Initial Inventory 18 12 6 6 6 12
Inventario Final 12 6 6 6 12 12

Monthly inventories Inventory

Julio Agosto Septiembre Octubre Noviembre Diciembre Annual
12 6 6 6 18 18 126
6 6 6 18 18 16 124

The sum of the results obtained in the calculation of the initial inventories and

Annual final figures by product yield a total inventory for Product 2 of

346 units.

Table 19 Monthly Inventories P2

Monthly inventories
Product 2
January Feb. March April May June
Initial Inventory 20 17 8 8 8 17

Final Inventory 17 8 8 8 17 17
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Monthly inventories Inventory

Julio Months. Sept. Oct. Nov. Dic. Annual
17 8 8 8 25 25 171
8 8 8 25 25 24 175

The sum of the results obtained in the calculation of the initial inventories and

Annual finals by product show a total inventory for Product 3 of 527.

units.

Table 20 Monthly Inventories P3

Monthly inventories
Product 3
January February March April May June
Initial Inventory 30 26 13 13 13 26
Final Inventory 26 13 13 13 26 26

Monthly inventories Inventory

July August September October November December Annual

26 13 13 13 38 38 260
13 13 13 38 38 36 266

The sum of the results obtained in the calculation of the initial inventories and

Annual finals by product yield a total inventory for Product 4 of 201.

units.

Table 21 Monthly Inventories P4

Monthly inventories
Product 4
January February March April May June
Initial Inventory 12 10 5 5 5 10
Final Inventory 10 5 5 5 10 10
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Monthly inventories Inventory

July August September October November December Annual

10 5 5 5 14 14 98
5 5 5 14 14 16 102

Once the initial and final inventories of each month are calculated, the process continues to

calculate the production budget taking into account the sales forecast and the

monthly inventories with the applied adjustment of 40%, accordingly it will be achieved

determine accurately the missing quantities to produce in order to reach the forecast

of sales taking into account the existence of the quantities located in the inventory

initial.

According to the above, the sales forecast result must be taken.

monthly per month and for each of the products, subtract them from the initial inventory and

add it to the final inventory:

Table 22 Production Budget in Units

Production budget in units

Products
January February March April May June
P1 24 24 15 15 21 30
P2 39 34 21 21 29 42
P3 60 51 32 32 45 64
P4 22 19 12 12 17 24
Total 144 128 80 80 112 160

Production budget in units Budget

July Agosto Septiembre Octubre Noviembre Diciembre Annual
24 15 15 27 45 43 298
34 21 21 38 63 62 424
51 32 32 58 96 94 646
19 12 12 22 36 38 244
128 80 80 144 240 236 1612
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An increase in production in units is evident for the month of January with 144

unidades a producir, febrero con 128 unidades, mayo con 112 unidades, junio con 160

units, July with 128, followed by October with 144 units and a significant increase

in the last two months of the year, November with 240 units and December with 236

units to be produced, the months that were not mentioned state that the production is low.

The production budget in units that the company must have.

It will be 1,612 total units annually, being the product number 3 of highest production.

with 646 units, followed by product number 2 with 424 units, the product number

1 with 298 units and finally product number 4 with 244 units sold.

forecasted for the year.

For the calculation of the labor budget in hours–worker, it is necessary to

multiply the production budget value in units of each of the four

products by the average hours of established operators:

Table 23 Labor Budget in Hours - Operator

Hours Labor budget in hours-operator

Products
worker January February March April May June
P1 6.2 149 149 93 93 130 186
P2 3.7 144 124 78 78 109 155
P3 10.7 638 548 342 342 479 685
P4 7.9 171 152 95 95 133 190
Total, hours-worker 1101 973 608 608 851 1216

Labor budget in man-hours Hours

July August September October November December Annual
149 93 93 167 279 267 1848
124 78 78 140 233 229 1569
548 342 342 616 1027 1002 6912
152 95 95 171 284 297 1928

973 608 608 1094 1824 1794 12256

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Finally, the amount of hours budgeted annually for the operators in

The manufacturing of each of the products will take 12,256 hours.

classified by product starting with 6,912 hours spent on product number 3,

followed by 1,928 hours spent on product number 4, then 1,848 hours

employees for product number 1 and finally 1,569 hours spent on the product

number 2, thus giving a total result of 12,256 projected annual hours in hand of

work.
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3. In the assembly process, Maderas del Ariari, S. A., consumes the following

elements per product:

Table 24 Consumption by Product

Consumption by Product
Products
Wood Fabric Adhesives Leather Springs
P1 1.8 1.3 30 8
P2 1,1 0.75 18 6
P3 2.5 1,1 22 8 1.60
P4 1.9 0.8 16 6 1.20

For each of the raw materials and elements used in the manufacturing,

Establish the following inventory levels and unit prices

Table 25 Inventories

Inventories
Prices
Raw materials and elements Initials (a Financial (a Unitarians
January 1 December 31
Wood 90 m2 80 m2 $1.300 /m2
Leather 32 m2 36 m2 $5,000 /m2
Fabric used in the manufacture P1, P2 20 m2 25 m2 $3.6000 / m2
Fabric Used in Manufacturing P3, P4 22 m2 28 m2 $1,200 / m2
Glue 3 pounds 5 pounds $3,000 / pound
Springs 290 units 300 units $50 / unidad

Based on the production program, the consumption standards of

raw materials, the initial and final inventory levels, and the unit prices, it is requested:

a. Determine the monthly purchasing program in quantitative terms and

monetary.

[Link] the monthly payment plan considering that 60% of the

purchases are cancelled in cash (to take advantage of the 7.5% discounts), 30% on the

same month of the purchase and 10% the following month after the acquisition. With the information
 21

supplementary information provided below, prepare the cash budget

monthly for the company Maderas del Ariari, S.A.

Table 26 Dividends to Be Recognized

Initial cash balance: $1,656,000

Dividends to be recognized Taxes payable
January $ 1.120.000
February $ 1.659.200
March $1,120,000
April $ 1.120.000
May $0
June 1,659,200
July $0
August $1,659,200
September $0
October $1,659,200
November $0
December $0

✓ Deudas con proveedores a pagar en el mes de enero: $420.000

✓ Accounts receivable in the month of January: $960,000

✓ Financial yields corresponding to a title issued by the Central Bank

and will be redeemed at the end of June (value of the title: $25.0 million):

$550,000/month

✓ Investment plan (replacement of personal computers, remodeling of

offices and acquisition of machinery to be used in wood cutting) that

will be fully executed in the month of July: $32,000,000

✓ Minimum cash balances expected at the end of the months from January to November:

third part of the scheduled payments for the next month. At the end of the month of

diciembre: $1.280.000
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Decisions to consider

✓ If there are cash surpluses (final balance greater than the minimum balance):

invest the surplus at a rate of 1% per month.

✓ If there are cash deficits (ending balance lower than the minimum balance):

obtain credits at an effective annual rate of 25%, with interest paid

in advance and taking into account that the amortization will take place as follows:

Three months later:

1
4
Six months later: 1
4

Nine months later: 1

4

A year later: 1
4

Burbano Ruiz, J. E. (2011).

 23

To calculate the total cost for the purchase of supplies, the established initial price must be multiplied by the

amount consumed per product:

Table 27 Input Costs

Purchase Costs for Supplies

Product Price January February March April May June

Wood $1,300 $ 369.200 $318,500 $ 198.900 $ 230.100 $ 326,300 $ 365.300

Leather $ 5.000 $ 655.000 $ 445.000 $ 330.000 $ 380.000 $540,000 $ 605.000

Fabric used in the manufacturing P1,
$ 3.600 $ 226.800 $ 172.800 $ 126.000 $ 147.600 $ 208.800 $ 234.000
P2
Fabric used in the manufacturing of P3,
$ 1,200 $ 108.000 $ 73.200 $ 54.000 $ 62.400 $ 87.600 $ 98.400
P4
Glue $3,000 $ 25.056 $ 14.070 $ 10.344 $ 12,000 $ 16.962 $ 19.032

Springs $50 $55,450 $ 39.050 $ 28.700 $ 33.300 $ 47.050 $ 52.800

Total, Mensual $ 1.439.506 $ 1.062.620 $ 747.944 $ 865.400 $ 1.226.712 $ 1.374.532

Purchase Costs for Supplies

Producto Price July August September October November December Total, Annual

Wood $1,300 $ 270.400 $ 198.900 $ 262.600 $453,700 $ 592.800 $ 455.000 $ 4.041.700

Leather $5,000 $ 445,000 $330,000 $ 435.000 $750,000 $ 980.000 $ 765.000 $ 6.660.000

Fabric Used in the
$ 3.600 $ 172.800 $ 126.000 $ 169.200 $288,000 $ 374.400 $ 309.600 $ 2,556,000
manufacturing P1, P2
Fabric Used in the
$1,200 $ 73.200 $ 54.000 $70,800 $ 122.400 $160,800 $ 129.600 $ 1.094.400
manufacturing P3, P4
 24

Glue $ 3,000 $ 14.070 $10,344 $ 13.656 $ 23.586 $ 30.768 $ 18.258 $ 208.146

Springs $ 50 $ 39.050 $28,700 $37,900 $ 65.450 $ 85.450 $ 65.700 $ 578.600

Total, Mensual $1,014,520 $ 747.944 $ 989.156 $ 1.703.136 $ 2.224.218 $ 1.743.158 $ 15.138.846

According to the above, the monthly total per product amounts to a total in wood of $4,041,700 million pesos, for the

cuero $6.660.000 millones de pesos, para las telas utilizadas en la fabricación del Producto 1 y producto 2 será de $2.556.000

Millions of pesos, for the fabric used in the manufacturing of P3 and P4 will amount to 1,094,400 million pesos, and for adhesive it is $280,146.

pesos and finally in springs $578,600 thousand pesos, obtaining a total of $15,138,846 million pesos annually.

To define the Monthly Payment Plan, the established policy must be taken into account; in this case, four are used.
modalities, payment equivalent to 60%, discount equivalent to 7.5%, one month equivalent to 30% and two months equivalent
to 10%
Table 28 Monthly Payment Plan

Monthly Payment Plan My

Politics Percentage January February March April May June July

Told 60% $ 863.704 $ 637.572 $ 448.766 $ 519.240 $ 736.027 $ 824.719 $ 608.712

Discount 7.5%
1 month 30% $431,852 $ 318.786 $ 224.383 $ 259.620 $ 368.014 $ 412.360

2 months 10% $ 143.951 $ 106.262 $ 74.794 $ 86.540 $ 122.671

$ 863.704 $ 1.069.424 $ 911.503 $ 849.885 $ 1.070.442 $1,279,273 $1,143,743

Total, Mensual
 25

Monthly Payment Plan Month

Politics Percentage August September October November December Total, Anual

Counted 60% $ 448.766 $ 593.494 $ 1.021.882 $ 1.334.531 $1,045,895 $ 9.083.307

Discount 7.5% $0

1 month 30% $ 304.356 $ 224.383 $ 296.747 $ 510.941 $ 667.265 $4,018,706

2 months 10% $ 137.453 $ 101.452 $ 74.794 $ 98.916 $ 170.314 $ 1.117.147

Total, Mensual $ 890.576 $ 919.329 $ 1.393.423 $ 1.944.387 $ 1.883.474 $14,219,160

According to the above, we can state that the monthly payment plan for the different modalities will be classified:

✓ In cash at 60% for a total annual of $9,083,307 million pesos

✓ 7.5% discount for an annual total of $0
✓ One month for a total annual of $4,018,706 million pesos
✓ Two months for a total annual of $1,117,146 million pesos

Finalmente, el plan de pagos mensual recolectara un total de $14.219.160 millones de pesos anuales.
 26

When calculating the monthly cash budget, the previously established values must be taken into account.
Table 29 Monthly Cash Budget

Descripción January February March April May June July

Initial cash balance $ 1,656,000 $ 1.656.000 $ 1.656.000 $ 1.656.000 $ 1.656.000 $ 1.656.000 $ 1.656.000

Operational activities $0 $0 $0 $0 $0 $0 $0
Cash inflow from sale of goods or
provision of services $0 $0 $0 $0 $0 $0 $0

Total $1,656,000 $1,656,000 $ 1.656.000 $ 1.656.000 $ 1.656.000 $ 1.656.000

Description August September October November December

Initial cash balance 1,656,000 $1,656,000 $ 1.656.000 $1,656,000 $1,656,000

Operational activities $0 $0 $0 $0 $0
Cash inflow from the sale of goods or
provision of services $0 $0 $0 $0 $0

Total $ 1.656.000 $ 1.656.000 $ 1.656.000 $ 1.656.000 $ 1.656.000

The effective annual budget should be classified according to the month and the initial forecasted annual amounts.
 27

Table 30 Cash Outflows

Cash Outflows January February March April May June July

To the suppliers for materials and
inventories $ 420.000 $0 $0 $0 $0 $0 $0
To the employees for services
(compensation of staff) $ 520.000 $ 520.000 $ 520.000 $ 520.000 $ 520.000 $520,000 $ 780.000
Equipment maintenance,
machinery and facilities $ 230.000 $230,000 $ 230.000 $ 230.000 $ 230.000 $ 230.000 $ 230.000
Insurance for machinery, equipment and
installations $ 520.000 $0 $520,000 $0 $520,000 $0 $ 520,000
Public services
$120,000 $ 120.000 $120,000 $ 120.000 $ 120.000 $ 120.000 $ 120.000
Office supplies
$ 230.000 $0 $ 230.000 $0 $ 230.000 $0 $ 230.000
Acquisition of spare parts
$ 320.000 $0 $0 320,000 $0 $0 $ 320.000
To borrowers for interests
$0 $0 $0 $0 $0 $0 $0
To the government for taxes
$ 1.120.000 $ 1.120.000 $1,120,000 $ 1.120.000 $0 $0 $0
To other suppliers by operation
$0 $0 $0 $0 $0 $0 $0
$ $
Total $ 3.480.000 1.990.000 $ 2.740.000 $ 2.310.000 1.620.000 $ 870.000 $2,200,000

Cash outflow for the first six months of the year January - July (First Semester).
 28

Cash Outflows August September October November December

To the suppliers for materials and inventories $0 $0 $0 $0 $0
To employees for services (personnel remuneration) $ 520.000 $ 520.000 $520,000 $ 520.000 $1,040,000
Maintenance of equipment, machinery and facilities $ 230.000 $ 230.000 $ 230.000 $ 230.000 $230,000
Insurance for machinery, equipment, and installations
$0 $0 $0 $0 $0
Public services $120,000 $ 120.000 $ 120.000 $120,000 $ 120.000
Office supplies $0 $230,000 $0 $230,000 $0
Acquisition of spare parts $0 $0 $320,000 $0 $0
To the borrowers for interest $0 $0 $0 $0 $0
To the government for taxes $0 $0 $0 $0 $0
To other suppliers by operation $0 $0 $0 $0 $0

Total $ 870.000 $ 1.100.000 $ 1.190.000 $ 1.100.000 $ 1.390.000

Cash outflow for the last six months of the year August-December (Second Semester).

The investment and cash flow should be divided by months:

 29

Table 31 Investment and Cash Flow

Investment and Cash Flows

Ene. Feb March Abr May Jun Jul Agos Sep Oct Nov Dic
in cash
$
Investment plan to be executed
32,000.0
totally in the month of June
$0 $0 $0 $0 $0 $0 00 $0 $0 $0 $0 $0
$
For the sale of debt or assets
960.00
accounts receivable
0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$
32,000.0
Total 960000 $0 $0 $0 $0 $0 00 $0 $0 $0 $0 $0

The investment plan will only be reflected in the month of July of the current year 32,000,000 million pesos, the accounts for

To be collected represents a total of 960,000 pesos, which must be paid in the first month of the year, January.
 30

Finally, the net present value is presented taking into account financing policies and cash flow.

subtracting the value of the initial balances, operating activities and cash inflows from goods services, minus the monthly value

of the cash flow, added to the initial investment and cash flows specifically represented in a month, plus the

monthly result of financing policies and cash flow:

Table 32 Financing Policies and Cash Flows

Policies of
Financing and Flows of January February March April May June July
Cash Income
for loans
$0 $0 $0 $0 $0 $0 $0
for the sale of equity securities
financial performance
corresponding to a title
issued, which will be redeemed at
$0 $0 $0 $0 $ 0 $ 3.300.000 $0
to culminate June $550,000 to
months
dividends to be recognized
$0 $ 1.659.200 $0 $ 1.659.200 $0 $ 1,659,200 $0
Total
$0 $ 1.659.200 $0 $ 1.659.200 $ 0 $ 4.959.200 $0

Valor Total Efectivo -$ 864.000 $ 1.325.200 -$ 1.084.000 $ 1.005.200 $ 36.000 $ 5.745.200 $ 31.456.000

For the first semester, losses of -$864,000 thousand pesos are evident in January and -$1,084,000 million.

pesos in the month of March, which must be recovered in the following months to achieve a break-even point.
 31

Financing Policies and Income Flows

August September October November December
Cash

por prestamos
$0 $0 $0 $0 $0
for the sale of equity securities (financial return)
corresponding to a title issued, which will be redeemed at $0 $0 $0 $0 $0
culminate June $550,000 a month

dividends to be recognized
$ 1.659.200 $ 0 $ 1,659,200 $0 $0
Total
$ 1,659,200 $ 0 $1,659,200 $0 $0

Total Cash Value $ 2,445,200 $ 556.000 $ 2.125.200 $ 556.000 $ 266.000

The recovery of the money will be reflected starting from April of the current year, taking into account all factors.

that produce the deficit, consumption of production, and low investment in a single month of the year, injecting or contributing an amount

considerable, in addition to the credit or financing policies for the purchase of the products for sale. It is necessary to generate

different strategies that boost sales, increase production, and prevent losses of merchandise and monetary values.
 32

4. The financial president of the company Blanyott Pharmaceutical Industries,

S.A. has consolidated the information related to the bimonthly cash budget.

as presented in table 6.8. To ensure the minimum balance, consider

alternativas de inversión que produzcan 2% bimestral o líneas de crédito

supported by interest rates of 6.0% bimonthly.

Table 33 Adjusted Cash Budget. Values in millions of pesos

Bimesters
Financial Concepts
1 2 3 4 5 6
Initial cash balances 899.6 739.8 812.1 957 771.2 925.4
Expected Revenue 1,520.80 1.760,50 2,105.20 2.174,60 2.195,00 2.226,40
Cash availability 2.420,40 2.500,30 2.917,30 3,131,6 2.966,20 3.151,80
Cash greetings 1.680,60 1.688,20 1.960,30 2.360,40 2.040,80 2.260,30
Final cash balances (FC) 739.80 812.10 957.00 771,20 925.70 891.50
Against the minimum balance set (MB) 724,20 784,10 945,00 816.40 904,70 880.60
Evaluation SF against SM 15.60 28,00 12.00 45.20 20.70 10.90
Adjusted cash budget. Values in millions of pesos

Table 34 Costs and Expenses

Concepts of
Jan Feb Mar Apr May Jun Jul Sep. Oct Nov Dic
cost and expense
Remuneration of
executive staff and $ 520 $ 520 $ 520 $ 520 $ 520 $ 520 $ 520 $ 520 $ 520 $ 520 $ 520 $1.040
employees
Maintenance of
teams,
$ 230 $ 230 $ 230 $ 230 $ 230 $ 230 $ 230 $ 230 $ 230 $ 230 $ 230 $ 230
machinery and
facilities
Insurance of
machinery
$ 520 $ 520 $ 520
teams and
facilities
Public services $ 120 $ 120 $ 120 $ 120 $ 120 $ 120 $ 120 $ 120 $ 120 $ 120 $120 $120

Supplies of
$ 230 $ 230 $ 230 $ 230 $ 230 $ 230
office
 33

Acquisition of
$ 320 $ 320 $320 $ 320
spare parts
Values in thousands of $.

Burbano Ruiz, J. E. (2011).

Initially, the data must be classified, this provides a clearer overview.

amplio, proyecta y determina los costos y gastos de acuerdo con los valores de los 12 meses

of the specified year and the 6 bimesters that compose it:

Table 35 Administrative Expenses

Bimesters Valor
Administrative Expenses
1 2 3 4 5 6 Annual

Compensation of management personnel

$ 1.040 $ 1.040 $ 1.040 $ 1.040 $ 1.040 $ 1.560 $ 6.760
and officials

Office supplies $ 230 $ 230 $ 230 $ 230 $ 230 $ 230 $ 1.380

Public services $ 240 $ 240 $240 $ 240 $ 240 240 dollars $ 1.440
Total, Bimestral $ 1.510 $ 1.510 $ 1.510 $ 1.510 $ 1.510 $ 2.030 $9,580

According to the previous table, each of the administrative expenses is evidenced.

per bimonthly period, that is to say for each bimonthly period the company must have $1,510.00 million

of pesos in the first five bimonthly periods and in the sixth considering the months of

November and December a value of $2,030,000 million pesos.

However, for the budget projection of staff remuneration

The annual management and officials budget will be $6,760,000 million pesos, for the purchase of

annual office supplies will be $1,380,000 million pesos and for the payment of the

public services will be $1,440,000 million pesos, resulting in a total expenditure

administrative expenses of $9,580,000 million pesos annually.

 34

Regarding operating costs, they are classified as those established in

maintenance, machinery insurance, equipment and installations, and the acquisition of

spare parts, the sum is calculated divided into the six two-month periods of the year derived from the 12

previously determined months:

Table 36 Operating Costs

Bimesters Valor
Operating Costs
1 2 3 4 5 6 Annual
Mantenimiento de equipos,
$ 460 $ 460 $ 460 $ 460 $ 460 $ 460 $ 2.760
maquinaria e instalaciones
Insurance for machinery, equipment, and
$ 520 $ 520 $0 $ 520 $0 $0 $ 1.560
installations
Acquisition of spare parts $ 320 $ 320 $0 $ 320 $ 320 $0 $ 1.280
Total, Bimestral $ 1.300 $ 1.300 $ 460 $ 1.300 $780 $ 460 $5,600

According to the above, we can assert that the annual value per bimonthly period for

The maintenance of equipment, machinery, and facilities will be $2,760,000 million.

pesos, followed by the annual value in the purchase of insurance, machinery, equipment and

installations which amount to $1,560,000 and subsequently the annual value of the acquisition of

spare parts of $1,280,000, however the total annual value that the company must provide

In order to ensure the proper functioning of your economic activity, it will be

$5,600,000, taking into account that in the bimonths 1 (January and February), 2 (March, April) and

In July and August, the operating cost of the three concepts does not vary and will be $1,300,000.

the bimesters 3 (May, June) and 6 (November, December) the value will be $460,000,000 and

for the fifth bimester (September, October) the value will differ with

$780.000.000
 35

To obtain the total annual value of the financial concepts, they must be added together in their

totality and classify them by the 12 months of the year, according to the statement the

results will be interpreted in billions, yielding a total value of 533,189,000

millions of pesos annually to ensure the production and payment of this industry

pharmaceutical

Table 37 Annual Budget Financial Concepts

Bimesters Value
Financial Concepts
1 2 3 4 5 6 Annual

Initial cash balances 899.6 739.8 812.1 957 771.2 925.4 5105.1
Planned Revenue 1.520,80 1.760,50 2.105,20 2.174,60 2.195,00 2.226,40 11982.5
Cash availabilities 2.420,40 2.500,30 2.917,30 3.131,60 2.966,20 3.151,80 17087,6
Cash greetings 1.680,60 1.688,20 1.960,30 2.360,40 2.040,80 2.260,30 11990.6
Final cash balances (FC) 739.80 812.10 957.00 771.20 925.70 891.50 5097.3
Against the minimum balance set (SM) 724.20 784.10 945.00 816.40 904.70 880,60 5055
SF assessment against SM 15.60 28.00 12.00 45.20 20.70 10.90 132.4

Total, Bi-monthly 8.001,00 8.313,00 9.708,90 10.256,40 9.824,30 10.346,90 56450,5

 36

It was characterized monthly in order to provide a projection.

annual budget and ensure that the company has the financial resources for

development of activities:

Table 38 Monthly Budget Financial Concepts

Months
Financial Concepts
Me Feb Mar Abr May June
Initial cash balances $ 450 $ 450 $ 370 $ 370 $ 406 $ 406
Expected Revenue $760 $ 760 $ 880 $ 880 $ 1.053 $1.053
Cash availability $ 1.210 $ 1.210 $ 1.250 $1,250 $ 1.459 $ 1.459
Cash greetings $ 840 $ 840 $ 844 $ 844 $ 980 $ 980
Final cash balances (FC) $ 370 $ 370 $ 406 $ 406 $ 479 $ 479
Against the minimum balance set (SM) $ 362 $ 362 $ 392 $ 392 $ 473 $ 473
SF evaluation against SM $8 $8 $14 $ 14 $6 $6
Total, Mensual $ 4.001 $ 4.001 $4.157 $ 4.157 $ 4.854 $ 4.854

Months
Annual Budget
Jul Ago Sep Oct Nov Dic
$ 479 $ 479 $ 386 $ 386 $ 463 $ 463 $5.105
$ 1.087 $ 1.087 $ 1.098 $ 1.098 $ 1.113 $ 1.113 $ 11.983
$ 1.566 1.566 $ 1.483 $ 1.483 $ 1.576 $ 1.576 $ 17.088
$1.180 $ 1.180 $1.020 $1.020 $ 1.130 $ 1.130 $ 11.991
$ 386 $ 386 $ 463 $ 463 $ 446 $ 446 $ 5.097
$ 408 $ 408 $ 452 $ 452 $ 440 $ 440 $ 5.055
$ 23 $ 23 $10 $ 10 $5 $5 $ 132
$ 5.128 $ 5.128 $ 4.912 $ 4.912 $ 5.173 $ 5.173 $ 56.451

Considering that the minimum balance must be guaranteed, it is taken into account

investment alternatives that yield 2%, these alternatives or strategies can be

determine quantitatively and qualitatively what drives the initial investment and benefits

to the company with an additional 2% in profits.

 37

Administrative expenses and operating costs are taken into account for the

investment alternatives understanding that it is about the Cord of the Pharmaceutical industry and

In the processes or actions of charges is where strategies must be deepened for the

increase in investment considering the modality used:

Table 39 Investment Alternatives Costs and Expenses

Bimesters Alternatives
Administrative Expenses of
1 2 3 4 5 6 Investment

Staff remuneration
$ 20,800 $ 20,800 $ 20,800 $2,080 $ 20,800 $ 31,200 $ 116,480
executive and officials

Office supplies $ 4,600 $ 4,600 $ 4,600 $4,600 $4,600 $4,600 $ 27,600

Public services $ 4,800 $ 4,800 $ 4,800 $ 4,800 $ 4,800 $ 4,800 $28,800

Total, Bimestral $ 30,200 $ 30,200 $ 30,200 $ 11,480 $ 30,200 $ 40,600 $ 172,880

Bimester Value
Operating Costs
1 2 3 4 5 6 Alternatives

Equipment maintenance
$ 9,200 $ 9,200 $ 9,200 $9,200 $ 9,200 $9,200 $ 55,200
machinery and facilities
Machinery insurance,
equipment and installations
$ 10,400 $ 10,400 $ 0,000 $ 10,400 $ 0.00 $ 0.000 $ 31,200

Acquisition of spare parts $ 6,400 $ 6,400 $ 0.000 6,400 dollars 6,400 dollars $ 0.00 $ 25,600

Total, Bimestral $ 26,000 $26,000 $ 9,200 $ 26,000 $ 15,600 $ 9,200 $ 112,000

In that line of thought, the investment increases by 2%, therefore the value would increase.

by quarters or months in Administrative Expenses for a total of $172,880,000 million

of pesos and $112,000,000 million pesos for operating costs. The above must

guaranteeing the company or Pharmaceutical Industry promoting its proper development of the

operation and economic activity.

 38

Bibliography

Burbano Ruiz, J. E. (2011). Budgets: a management approach

strategic, management, and resource control. [Link]://www-ebooks7-24-

[Link]/?il=3