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Cash Budget Week 5 Assignment: Cash Budget for Hoyt, Inc
Coursework Instructions:
*Answer the following questions
a. How long does it take for Charger to collect on its receivables? Explain/Show Work
b. How long does merchandise stay around before it is sold? Explain/Show Work
c. How long does it take Charger to pay its bills? Explain/Show Work
d. What is Charger’s operating cycle? Explain/Show Work
e. What is Charger’s cash cycle? Explain/Show Work
Coursework Sample Content Preview:
Cash Budget Week 5
Name
Institution
Date
1. Hoyt, Inc. has estimated current year sales (in millions) for the next four quarters.
Q1: $240 / Q2: $250 / Q3: $205 / Q4: $350
- Sales for the 1st quarter next year are projected to be $230.
- Accounts Receivable at the beginning of the year was $100.
- Beginning Accounts Payable were $60.
- The beginning cash balance is $50.
- Hoyt, Inc. cash collection schedule is as follows: 60% of sales in the current quarter, 40% in the 1st quarter after sale.
· Purchases from suppliers in a quarter are equal to 50% of the next quarter’s forecasted sales.
· Suppliers are normally paid in 50% in the quarter purchases are made and 50% in the following quarter.
· Wages, taxes and other expenses are 20% of current quarter sales · Hoyt, Inc. maintains a minimum cash balance of $30
| Q1 | Q2 | Q3 | Q4 | |
| Beginning receivables | 100 | 96 | 100 | 82 |
| Sales | 240 | 250 | 205 | 350 |
| Cash collections | 244 | 246 | 223 | 292 |
| Ending receivables | 96 | 100 | 82 | 140 |
| Beginning payables | \ | |||
|
Payment of accounts
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