Cash Budget for Cyrus Brown

This is for a financial management class, year 3.

Please show your work, including the forumla calculations on how you arrived at the financial values, so that I can fully understand.

a) prepare an estimate of the required financing needs (or excess funds) for each month during the budget period
b) based on your findings in part b, will the company need any outside financing? What is the minimum line of credit the company would need?
c) What do you think of the cash position during the budget period? Do you see any concerns for the company in this regard?
d) If you were a bank manager would you want your company as your client? Why or why not?

These are the sales forecast for the company in the next nine months:
MARCH 2004 $250,000
APRIL 275,000
MAY 320,000
JUNE 450,000
JULY 575,000
AUGUST 700,000
SEPTEMBER 825,000
OCTOBER 350,000
NOVEMBER 285,000
Collection within the month of sale, 10%; collection the month following seles, 75%, and collection the second month following sales, 15%. Payments for direct manufacturing costs like raw materials and labor are made during the month that follows the one in which such costs have been incurred. These costs are estimated as follows:
MARCH 2004 $187,500
APRIL 206,250
MAY 240,000
JUNE 337,500
JULY 431,250
AUGUST 525,000
SETPEMBER 618,750
OCTOBER 262,500
Administrative salaries will approximately amount to $35,000 a month; lease payments around $15,000 a month; depreciation charges, 15000 a month; a one-time new plant investment in the amount of $95,000 is expected to be incurred and paid in June; income tax payments estimated to be around $55,000 will be due in both June and September; and finally, miscellaneous costs are estimated to be around $10,000 a month. Cash on hand on March one will be around $50,000; and a minimum cash balance of $50,000 shall be on hand at all times.