for the next year for the business described in the following scenario: Assume you are thinking about starting a business and would like to forecast your cash needs for the next six months. You expect sales to be approximately $30,000 per month for the first 12 months and your purchases to support sales will be approximately 60% of sales. You anticipate about 20% of your sales will be cash and 80% collected the following month. Your supplier has agreed to extend credit for 70 days at no cost (i.e. you will pay your bills on a two month lag). Your monthly expenses for rent, wages, utilities, and so forth will be approximately $3,500 per month. Identify which of these are fixed costs and which ones are variable costs. You have deposited $15,000 in a checking account to begin your operations and would like to maintain a minimum balance of $5,000 in that account. After building the cash budget, use it to address the foll
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
This practice exercise explores simple cash budgets. Create a spreadsheet file that contains a simple monthly
Assume you are thinking about starting a business and would like to
After building the cash budget, use it to address the following:
Explain the purpose of creating budgets and how your budget will help the business remain capitalized
Will you need additional funds at some point? Justify your answer.
How would you raise capital in the future?
Using the cash budget and answers to the above questions, create a 3-page APA-formatted paper explaining how to use the cash budget to finance the business illustrated in the scenario. Make sure to include the cash budget in an appendix.
If answered within 1hr,it would be appreciable.
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