1. Which months have a negative cash flow?

2. Which month/s require financing.

3. List 2 methods of funding cash shortfalls with a brief (2-4 sentences) explanation. Cite if outside sources are used.

Cash budget	Aug	Sept	Oct	Nov	Dec.
Sales	200	300	400	300	200
Cash	40	60	80	60	40	20.0%
AR-1 mo		80	120	160	120	40.0%
AR-2 mo			80	120	160	40.0%
Other cash receipts					30
Total cash receipts	40	140	280	340	350
Purchases	120	180	280	180	120	0.60
Cash	12	18	28	18	12	10.0%
AP-1 mo		72	108	168	108	60.0%
AP-2 mo			36	54	84	30.0%
Rent			10	10	10
Wages			80	60	40
Tax					25
Fix Assets				70
Interest					10
Dividend			20
Principal	removed
Total cash disp	12	90	282	380	289
Cash Budget			Oct.	Nov.	Dec.
Cash Receipts			280	340	350
Less Cash Disb.			282	380	289
Net cash flow			-2	-40	61
Add: Beg. Cash			50	48	8
End Cash			48	8	69
Less minimum cash balance			25	25	25
Required Financing (notes payable)				-17
Excess cash (marketable securities)			23

AC Company has sales of $16,000,000 with cost of goods 30% of sales, operating expenses 40% of sales, depreciation expense of $100,000, tax rate 30%, dividend payout 20%. NOTE: show your work by uploading the entire proforma income statement either using a spreadsheet, word document, or scan of handwritten computation.

1. If they expect sales growth of 20% next year, what is their expected net profit? Depreciation remains the same. Use the percent of sales method discussed in the recording.

2. If they have 1 million shares of stock outstanding what is their projected EPS (earnings per share) and DPS (dividend per share) for next year?

Income Statement
Sales	16,000,000
Less COGS	4,800,000
Gross Profit	11,200,000
less Operating exp.	6,400,000
less Depreciation exp	100,000
EBIT Oper. Profit	4,700,000
less Interest exp	160,000
EBT	4,540,000
less Tax 30%	1,362,000
EAT Net Profit	3,178,000
Dividend	635,600
RE	2,542,400
EPS	3.18