DATA:

ACTUAL SALES FORECASTED SALES

January $50,000 May $70,000

February 50,000 June 80,000
March 60,000 July 100,000
April 60,000 August 100,000

April 30, cash balance $20,000

Minimum cash balance required before borrowing $20,000

Accounts receivable collections:

Current 31 - 60 days 61 - 90 days

50% 25% 25%

Cost of goods manufactured

Percentage of sales 70%

Percentage paid:

Current 31 - 60 days

10% 90%

Selling, general, and administrative expenses:

Fixed monthly amount $10,000

Plus percentage of sales 10%

Interest payments:

Bond face amount $150,000

Annual coupon rate 12%

Bond sinking fund payment $50,000

Dividends:

Dividends paid during the period $10,000

Capital expenditures:

Investments in plant and equipment $40,000

Taxes:

Payments made during the period $1,000

Schedule of projected sales and collections
for May to July (in thousands)

MAR APR MAY JUNE JULY

Frame A: Sales

Credit sales, 50%

Cash sales, 50%

Total sales, 100%

Frame B: Cash Collections

Cash sales, this month

50% of last month's

credit sales

50% of two-month old

credit sales

Total cash receipts

AUG
Schedule of projected disbursements
for operating expenses for May to July (in thousands)

MAR APR MAY JUNE JULY

Frame A: Cost of goods mfg.

Frame B: Cash disbursements for

cost of goods mfg.

90% of last month's sales

10% of two-month old cost

Total disbursements for

cost of goods mfg.

Frame C: Cash disbursements for

selling, general, and
administrative expenses

100% of current month's expense

Total disbursements for

all operating expenses
AUG
Schedule of projected total cash disbursements
for May to July (in thousands)

MAY JUNE JULY

Total disbursements for all

operating expenses
Interest payment
Sinking fund payment
Dividend payment
Capital expenditures
Tax payments

Total cash disbursements

Schedule of projected net cash flows
and cash balances for May to July (in thousands)

MAY JUNE JULY

Beginning cash balance,

without additional financing

Total cash receipts

Total cash disbursements

Net cash flow

Ending cash balance

"Cumulative" borrowing required

to maintain minimum cash
balance to $20,000

Ending cash balance with

additional financing