precision machines, engineering homework help

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Precision Machines Student Note: Fill in the light yellow cells Data: Annual Cost of borrowing Minimum Cash Balance Beginning Cash Balance Revenues (Sales) Cash Collections First Month (30%) Second Month (35%) Third Month (35%) Total Collections Cash Disbursements Material Purchases Salaries Wages Other Expenses Capital Expenditure Dividends Interest Total Disbursements Cash flows Net cash flows Cumulative cash flows Minimum Cash Balance Cash Surplus or (Deficit) Recommendations: November December January February $40,000.00 $50,000.00 $48,000.00 $55,000.00 November $12,000.00 December $15,000.00 14,000.00 January $14,400.00 17,500.00 14,000.00 $45,900.00 February $16,500.00 16,800.00 17,500.00 $50,800.00 $20,000.00 $25,000.00 6,000.00 3,000.00 $24,000.00 6,000.00 3,500.00 $34,000.00 $33,500.00 10.00% $5,000.00 $7,500.00 $11,900.00 $19,400.00 $5,000.00 $14,400.00 $17,300.00 $31,700.00 $5,000.00 $26,700.00 March April May June $35,000.00 $50,000.00 $65,000.00 $40,000.00 March $10,500.00 19,250.00 16,800.00 $46,550.00 April $15,000.00 12,250.00 19,250.00 $46,500.00 May $19,500.00 17,500.00 12,250.00 $49,250.00 June $12,000.00 22,750.00 17,500.00 $52,250.00 $27,500.00 6,000.00 3,000.00 $17,500.00 6,000.00 3,200.00 $25,000.00 6,000.00 3,500.00 $32,500.00 6,000.00 3,000.00 45,000.00 1,000.00 1,000.00 $82,500.00 1,425.00 $28,125.00 $35,950.00 ($9,250.00) $5,000.00 $14,250.00 $18,375.00 $4,125.00 $5,000.00 ($875.00) $34,500.00 $14,750.00 $13,875.00 $5,000.00 $8,875.00 $42,500.00 $9,750.00 $18,625.00 $5,000.00 $13,625.00 Precision Machines Team Assignment FIN/370 Version 10 University of Phoenix Material Precision Machines Read the following case study: Precision Machines is preparing a financial plan for the next six months to determine the financial needs of the company. The historical analysis of the company’s sales shows that the company’s total sales are 30% cash sales and 70% credit sales. Further analysis of credit sales shows that the company receives 50% of the credit sales one month after the sale and the remaining 50% in the second month after the sale. This means the cash collections from sales are 30% in the first month of the sale, 35% in the second month, and 35% in the third month. The materials purchased by the company amounts to 50% of the sales for the month. The company pays for the purchases one month after the initial purchase. The company likes to maintain a cash balance of $5,000. The cost of borrowing is 10%. The company plans to pay off the loan whenever there is a surplus and borrow when there is a deficit. The attached spreadsheet shows revenues (sales), expenses, capital expenditures, and other expenses for Precision Machines’ next six months. Using the information given on the spreadsheet, prepare a cash budget for January through June and determine the cash surplus, deficit, and the financing needs of the company. Copyright © XXXX by University of Phoenix. All rights reserved. 1 Running head: PRECESSION MACHINES PART 1 Precession Machines Part 1 Ricky Valenzuela, Cedric Hughey, Brain Jennings, James Harraway, Natasha Moringlane University of Phoenix FIN/370 Donald Green 1 PRECESSION MACHINES PART 1 2 Annotated Bibliographies Balsara, N. J. (1992). Money Management Strategies for Futures Traders. : John Wiley & Sons Inc.. The techniques of money management can mean the difference between sound investing and reckless gambling in the future markets. In the "Money Management Strategies for Future Traders" it demonstrates the art of disciplined risk-taking in order to avoid getting annihilated as speculator. In Money Management Strategies for Futures Traders, the reader will learn how to integrate proven money management strategies into the trading of futures. Requiring almost no mathematical expertise, it shows the reader how to measure and limit risk-without compromising the enormous benefits that attracted the reader to these markets in the first place. The reader will learn how to master the money management process and all its components, choose the markets that are right for them, assess risk and reward trade-by-trade, allocate capital across competing opportunities, use probability theory to reduce risk dramatically, use leverage intelligently, Harness the laws of probability to improve your odds of success, make stop-loss orders work, and diversify to reduce risk and maximize profit For Dummies, (2016), Ten forces that Impact Business, http://www.dummies.com/how-to/content/10-forces-that-impact-businesses.html The Two economics and market forces that will impact the company financial plan would be for the precision machine new competitors and meeting customer's needs. Acquisitions and mergers would be a major factor. The company needs to improve cash revenue and develop the management plan to increase liquid assets with a short- term strategy. Stability will suffice when the financial plan generates a right amount of cash flow for monthly expenses. A plan set in place PRECESSION MACHINES PART 1 3 for six months to meet financial needs and monitoring the outcome through set goals. This new financial plan determines the company's success, 30% cash remains in the credit line, minimizing cash deficits will benefit the company. The machines can improve financial position as they innovate and create a product that helps the plan (For Dummies, 2016). Distributors and the supply changes, acquisitions, and mergers can strengthen the competitors and cause a loss with a distributor or supplier. These are key factors that the company needs to focus and create stability. Three Crucial Factors Affecting Financial Planning, Holistic Investment Planners-SocioEconomic(2015): http://www.holisticinvestment.in/factors-affecting-financial-planning/ Economic and market forces that impact financial planning vary. Many issues that companies face in today’s market come from social and economic policies. Social and economic policies can and will always influence financial planning. Even the smallest policy change can have a long lasting effect on how a company conducts business and plan future financial moves. Social and economic policies also define how companies create and maintain wealth. Social and economic policies set specific financial guidelines that companies have to follow. These guidelines will insure that financial business is conducted correctly. Without having smart investment planning and keeping up to date with current social and economic policies your company will be doomed. Socio-Economic uncertainty is also another important factor that needs to considered when financial planning. Keeping up with current financial trends, and different scenarios that come up can help a company greatly prepare for any issues that may arise in the financial market. PRECESSION MACHINES PART 1 4 Evans, M. (2014, May 4). Are You Growing Your Business Into The Ground? -5 Ways To Increase Cash Flow. Retrieved from Forbes: http://www.forbes.com/sites/allbusiness/2014/05/04/5-ways-to-increase-cashflow/#6e8b20406e4e On this article, Michael Evans discusses the business factors that determine the success of a business. According to him there are several factors that determine the business of the company and these includes the size of the company, product/service, its industry, the capital structure, and many more. However, the most important factor that measures the success of the company is the free cash flow of the company. In order for the company to increase its cash flow and its free cash flow, they have to try to negotiate trade credits with their suppliers, reduce its level of inventory, speed up the collection of its accounts receivable, find a different way to capitalize their business, expand the business by having growth strategies. Michael Evans is the managing director of Newport Board group, and has 34 years of experience serving in tax, audit and consulting services. He also has experience of advising small medium business on tax strategy and planning. Note: There are two parts to this learning team assignment; Part 1 was completed in Week 3. Review the "Precision Machines" document and spreadsheet. Prepare a cash budget for Precision Machines in Microsoft® Excel®. Create a 1,225-word strategic analysis and include the following:   Recommend a cash management strategy for the company that will minimize the financing cost and increase the cash flows for the company. Explain two economic and market forces that will impact the financial plan of this company. Format your documents consistent with APA guidelines. Click the Assignment Files tab to submit your assignment.
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Explanation & Answer

Attached.

Precision Machines
Student Note: Fill in the light yellow cells
Data:
Annual Cost of borrowing
Minimum Cash Balance
Beginning Cash Balance
Revenues (Sales)

Cash Collections
First Month (30%)
Second Month (35%)
Third Month (35%)
Total Collections
Cash Disbursements
Material Purchases
Salaries
Wages
Other Expenses
Capital Expenditure
Dividends
Interest
Total Disbursements
Cash flows
Net cash flows
Cumulative cash flows
Minimum Cash Balance
Cash Surplus or (Deficit)

November December

January

February

$40,000.00 $50,000.00

$48,000.00

$55,000.00

November December

January

February

$12,000.00 $15,000.00
14,000.00

$14,400.00
17,500.00
14,000.00
$45,900.00

$16,500.00
16,800.00
17,500.00
$50,800.00

$20,000.00

$25,000.00
6,000.00
3,000.00

$24,000.00
6,000.00
3,500.00

$34,000.00

$33,500.00

$11,900.00
$19,400.00
$5,000.00
$14,400.00

$17,300.00
$31,700.00
$5,000.00
$26,700.00

10.00%
$5,000.00
$7,500.00

Recommendations:

The company can device ways to increase the expected cash flows.This will include offering of discounts to the custo

March

April

May

June

$35,000.00

$50,000.00

$65,000.00

$40,000.00

March

April

May

June

$10,500.00 $15,000.00 $19,500.00 $12,000.00
19,250.00 12,250.00 17,500.00 22,750.00
16,800.00 19,250.00 12,250.00 17,500.00
$46,550.00 $46,500.00 $49,250.00 $52,250.00

$27,500.00 $17,500.00 $25,000.00 $32,500.00
6,000.00
6,000.00
6,000.00
6,000.00
3,000.00
3,200.00
3,500.00
3,000.00
45,000.00
1,000.00
$82,500.00

1,000.00
1,425.00
$28,125.00

$34,500.00

$42,500.00

($35,950.00) $18,375.00 $14,750.00
$9,750.00
($9,250.00) $4,125.00 $13,875.00 $18,625.00
$5,000.00
$5,000.00
$5,000.00
$5,000.00
($14,250.00)
($875.00) $8,875.00 $13,625.00

ering of discounts to the customers who pay for their purchases earlier.. Another method is to offer quantity discounts such that t


Running head: PRECISION MACHINES

1

Precision Machines Strategic Analysis
Name
Institution

2

PRCEISIONS MACHINES
Strategic Analysis
Just like an...


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