APA paper and Spreadsheet check
copy_of_precision_machines_financial_statements.xls
fin370r10_precision_machines_team_assignment_weeks_3_and_5.doc
precession_machines_part_1.docx
assigment_instructions.docx
Unformatted Attachment Preview
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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