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Estimate of the Required Financing

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With the given calculation as follows what is the estimate of required financing needs for each month during the budget period and how much if any will the company need outside financing base on this assumption?
Month Sales Collections Costs incurred Payments(raw material) Administrative+lease Depreciation One time investment Income Tx Misc Exp Cash on Hand at month end Min Reqd Financing Reqd Cash on Hand
March $250,000.00 $25,000.00 $187,500.00 $- $50,000.00 $15,000.00 $10,000.00 ($35,000.00) 50,000 $85,000.00 $50,000.00
April $276,000.00 $215,100.00 $206,250.00 $187,500.00 $50,000.00 $15,000.00 $10,000.00 ($32,400.00) 50,000 $82,400.00 $50,000.00
May $320,000.00 $276,500.00 $240,000.00 $206,250.00 $50,000.00 $15,000.00 $10,000.00 $50,000.00 50,000 $- $50,000.00
June $450,000.00 $326,400.00 $337,500.00 $240,000.00 $50,000.00 $15,000.00 $95,000.00 $55,000.00 $10,000.00 ($73,600.00) 50,000 $123,600.00 $50,000.00
July $575,000.00 $443,000.00 $431,250.00 $337,500.00 $50,000.00 $15,000.00 $10,000.00 $95,500.00 50,000 $- $95,500.00
August $700,000.00 $568,750.00 $525,000.00 $431,250.00 $50,000.00 $15,000.00 $10,000.00 $77,500.00 50,000 $- $77,500.00
September $825,000.00 $693,750.00 $618,750.00 $525,000.00 $50,000.00 $15,000.00 $55,000.00 $10,000.00 $53,750.00 50,000 $- $53,750.00
October $350,000.00 $758,750.00 $262,500.00 $618,750.00 $50,000.00 $15,000.00 $10,000.00 $80,000.00 50,000 $- $80,000.00
November $285,000.00 $414,750.00 $262,500.00 $50,000.00 $15,000.00 $10,000.00 $92,250.00 50,000 $- $92,250.00

Note : only the highlighted portion is asked.
Cash on hand on May 1 is given as 50,000
Depreciation is an expense only on paper, it is not a cash flow. So it is not included in the calculations.

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Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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