Case 1

Year Month Sales Forecast

2015 September $210.000 $120.000
2015 October 250.000 150.000
2015 November 170.000 140.000
2015 December 160.000 100.000
2016 January 140.000 80.000
2016 February 180.000 110.000
2016 March 200.000 100.000
2016 April 250.000 90.000

a. Here are the cash balances at the-end-of the month from November to April if we
assume the firm have a cash balance of $22,000.
November December January February March April
Cash Receipt 218.000 200.000 175.000 183.000 183.000 214.000
Less : Cash Disbursments 207.000 219.000 196.000 139.000 153.000 303.000
Net Cash Flow 11.000 -19.000 -21.000 44.000 30.000 -89.000
Add : Beginning Cash 22.000 33.000 14.000 -7.000 37.000 67.000
Ending Cash 33.000 14.000 -7.000 37.000 67.000 -22.000

b. Here are the total financing or excess cash balance from November to April if we
assume the firm maintain a $15,000 minimum cash balance.
November December January February March April
Cash Receipt 218.000 200.000 175.000 183.000 183.000 214.000
Less : Cash Disbursments 207.000 219.000 196.000 139.000 153.000 303.000
Net Cash Flow 11.000 -19.000 -21.000 44.000 30.000 -89.000
Add : Beginning Cash 22.000 33.000 14.000 -7.000 37.000 67.000
Ending Cash 33.000 14.000 -7.000 37.000 67.000 -22.000
Less : Minimun Cash Balance 15.000 15.000 15.000 15.000 15.000 15.000
Requires total financing - 1.000 - 22.000 - 37.000 32.000
Excess 18.000 22.000 52.000

c. The line of credit should be at $37,000 to cover the maximum needs for the Month of
April.