Scribd
Upload
15 views29 pages

Business Finance: Budgeting & Cash Flow

The document outlines the preparation of budgets and projected financial statements, including formats for calculating projected sales, cash receipts, and cash disbursements. It provides detailed computations for cash flow analysis, including net cash flow and ending cash balances for each quarter. Additionally, it emphasizes the importance of maintaining a minimum cash balance to determine excess cash or financing needs.

Uploaded by

avimae57
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
15 views29 pages

Business Finance: Budgeting & Cash Flow

The document outlines the preparation of budgets and projected financial statements, including formats for calculating projected sales, cash receipts, and cash disbursements. It provides detailed computations for cash flow analysis, including net cash flow and ending cash balances for each quarter. Additionally, it emphasizes the importance of maintaining a minimum cash balance to determine excess cash or financing needs.

Uploaded by

avimae57
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

BUSINESS FINANCE

Mary Ann D. Leopando


• After accomplishing this module, you are expected to illustrate the
formula
• and format for the preparation of budgets and projected financial
statement
• (ABM_BF12-IIIc-d11).
Use the following format

QUARTER
1 2 3 4 ANNUAL
Projected Sales
Add: Target Level of ending inventories
Total
Less: Beginning inventories
Required Production

In order to get the production units, add the target level of ending inventories
and then less the beginning inventories.
Answer
Format for Cash Receipts
Computation of Cash Receipts
Q1 Q2 Q3 Q4
Sales for the quarter

Sales from last quarter


Collection from last quarter

CASH RECEIPTS - - - -
ANSWER

Computation of Cash Receipts


Q1 Q2 Q3 Q4
Sales for the quarter 1,010,000.00 1,110,000.00 1,210,000.00 1,310,000.00
x 85% x 85% x 85% x 85%
858,500.00 943,500.00 1,028,500.00 1,113,500.00

Sales from last quarter 900,000.00 1,010,000.00 1,110,000.00 1,210,000.00


Collection from last quarter x 15% x 15% x 15% x 15%
135,000.00 151,500.00 166,500.00 181,500.00
CASH RECEIPTS 993,500.00 1,095,000.00 1,195,000.00 1,295,000.00
• 2. Compute for the cash disbursements. Identify all the payments to
be made and add all expenses.
• Use this format
Computation of Cash Disbursement
Q1 Q2 Q3 Q4
Cost of Sales
x 75% x 75% x 75% x 75%
- - - -
Cash Operating Expense
Income Taxes
Interest Expense
Loan payment
CASH DISBURSEMENT - - - -
answer
Computation of Cash Disbursement
Q1 Q2 Q3 Q4
Cost of Sales 1,010,000.00 1,110,000.00 1,210,000.00 1,310,000.00
x 75% x 75% x 75% x 75%
757,500.00 832,500.00 907,500.00 982,500.00
Cash Operating Expense 101,000.00 111,000.00 121,000.00 131,000.00
Income Taxes 30,000.00 45,000.00 50,000.00 55,000.00
Interest Expense 15,000.00 15,000.00 15,000.00 15,000.00
Loan payment 300,000.00
CASH DISBURSEMENT 903,500.00 1,003,500.00 1,093,500.00 1,483,500.00
• 3. Subtract the cash disbursement from the cash
receipts to get the net cash flow

• 4. Add the beginning cash balance and then


subtract the minimum cash balance. If the
minimum cash balance is less than the ending
cash balance, the firm has excess cash. If the
minimum cash balance is greater than the
ending cash balance, the firm requires financing
Use this format

Q1 Q2 Q3 Q4
Cash Receipts
Less: Cash Disbursements
Net Cash Flow
Add: Beginning Cash
Ending Cash Balance
Less: Minimum Cash Balance
Excess Cash Balance
COMPUTATION OF CASH BUDGET
Q1 Q2 Q3 Q4
Cash Receipts 993,500.00 1,095,000.00 1,195,000.00 1,295,000.00
Less: Cash Disbursements 903,500.00 1,003,500.00 1,093,500.00 1,483,500.00
Net Cash Flow 90,000.00 91,500.00 101,500.00 - 188,500.00
Add: Beginning Cash 40,000.00 130,000.00 221,500.00 323,000.00
Ending Cash Balance 130,000.00 221,500.00 323,000.00 134,500.00
Less: Minimum Cash Balance 100,000.00 100,000.00 100,000.00 100,000.00
Excess Cash Balance 30,000.00 121,500.00 223,000.00 34,500.00
PROJECTED FINANCIAL
STATEMENTS

You might also like