Megan Williams, the chief financial officer, is responsible for Dollar Depot's cash budget for 2017. The budget will help Williams determine if long-term borrowing is needed to end the year with a cash balance of $175,000 or if the company will have excess cash to end the year. Williams' assistants have assembled budget data for 2017, which the computer printed in alphabetical order. Not all the data items reproduced below are used in preparing the cash budget.
(Assumed Data) (In thousands)
Actual cash balance, December 31, 2016 ........................................ $ 100
Budgeted total assets, December 31, 2017 ........................................... 22,177
Budgeted total current assets, December 31, 2017 .................................... 7,476
Budgeted total current liabilities, December 31, 2017 ................................ 4,760
Budgeted total liabilities, December 31, 2017 ....................................... 11,588
Budgeted total stockholders' equity, December 31, 2017 ........................... 7,197
Collections from customers .............................................................. 20,400
Dividend payments .......................................................................... 257
Issuance of stock .............................................................................. 647
Net income .................................................................................. 1,163
Payment of long-term and short-term debt ............................................... 950
Payment of operating expenses ........................................................... 2,349
Payments for inventory items ........................................................... 14,445
Purchase of property and equipment with cash ....................................... 1,548
Requirements
1. Construct the cash budget of Dollar Depot, Inc.
2. Compute Dollar Depot's budgeted current ratio and debt ratio at December 31, 2017.
3. Williams plans to end the year with a cash balance of $175,000. Determine whether she will need to arrange additional financing or will have excess cash to invest.