Bridgeport Ltd. has produced the following summary profit budget and cash forecast for the next six months.
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Bridgeport Ltd. has produced the following summary profit budget and cash forecast for the next six months.
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Bridgeport Ltd.: Profit Budget ($thousands) Jan. Feb. Mar. Apr. May June Sales $1,000 $1,000 $1,000 $2,000 $2,000 $2,000 Cost of sales 400 400 400 800 800 800 Gross profit 600 600 600 1,200 1,200 1,200 Overheads 350 350 350 350 350 350 Net profit $ 250 $ 250 $ 250 $850 $ 850 $ 850 Cash forecast ($thousands) Net profit Capital expenditure Loan repayment Cash flow $250 $ 250 $ 250 $ 850 $850 $ 850 (100) (250) (400) $ 150 $ 250 $ 250 $ 600 $ 450 $ 850 a. What assumptions can you make about the business based on these figures? b. What questions would you want to ask in relation to the figures?
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