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Analyzing Financial StatementsCash Budget

$\backslash$table$[[,$January,February,March,April,May,June$],[1.$ Beginning cash$],[2.$ Receipts$],[3.$ Total cash available$],[4.$ Material purchases$],[5.$ Labor$/$Overhead$],[6.$ S$,$ G$,$ & A$*],[7.$ Owner's salary$],[8.$ Interest expense$],[9.$ Total disbursements$],[10.$ Loan principal$],[11.$ Capital expenditures$],[12.$ Dividends$],[13.$ Total cash paid out$],[14.$ Net cash position$],[15.$ Minimum cash$],[16.$ Loan requirement$],[\backslash$table$[[17$ Cumulative$],[$borrowing$/$reduction$]],,,,,,]]$

$*$Selling$,$ general, & administrative expenses

Cash Budget

Final assignment

Ideas, Inc. is a new electronic manufacturing and research firm founded by a group of graduates of schools of engineering and business administration. The company is just getting started and wants to project where it will be at the end of its first six months of operation.

The founders contributed $$55,000$ in exchange for common stock, while $$45,000$ came from outsiders, also in exchange for common stock. The new firm expects to rent manufacturing space for $$3,000$ per month. Overhead is estimated at $$25,000$ per month. Equipment $($Capital Expenditure$)$ worth $$60,000$ was purchased with part of the initial funds. Firm orders for $$500,000$ worth of products are on hand, with more expected $($this statement is to justify the sales projection it is not put in the cash budget$).$ Sales are projected at $$100,000$ per month. Labor costs are estimated to amount $$20,000$ per month, and materials and supplies will be purchased at the rate of $$40,000$ per month.

The sales and administrative expenses are expected to run about $$18,000$ per month for the first several months. Collections are expected to average about $30$ days, while purchases are to be made mostly on terms of net $30$ days. The minimum cash balance needed for operations is $$15,000.$

Is the business adequately capitalized?

What suggestions do you have for the business?

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