Adjust the Cash Balance

We obtain the following $2020$ forecasts of selected financial statement line items for Journey Company.

$ millions $2019$ Actual $2020$ Est.

Net Sales $$708,554$ $$740,439$

Marketable securities $67,09662,096$

Long$-$term debt $346,558308,437$

Treasury stock $($deducted from equity$)51,17451,174$

Cash generated by operations $57,696$

Cash used for investing $(14,908)$

Cash used for financing $(54,660)$

Total net change in cash $(11,872)$

Cash at beginning of period $51,141$

Cash at end of period $$39,269$

Note: Complete the entire question in Excel using the following template: Excel Template. Format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places.

a$.$ Does forecasted cash deviate from the normal level for this company?

Calculate the company's normal cash level as a percentage of sales.

Normal cash as a $\%$ of sales

Answer

Using the answer above, compute what should be the normal cash balance for FY$2020.$

Normal cash balance for FY$2020$

Answer

b$.$ Is the deviation in part a large enough to require adjustment? Explain.

Answer

c$.$ Identify three ways to adjust the forecasted cash balance.

Which option would least likely be used to adjust the cash balance?

Answer

d$.$ Complete the following statement of cash flows assuming long$-$term debt is used to adjust the forecasted cash balance.

Statement of Cash Flows

Cash generated by operations Answer

Cash used for investing Answer

Cash used for financing Answer

Total change in cash Answer

Cash at beginning of period Answer

Cash at end of period Answer

e$.$ Complete the following statement of cash flows assuming marketable securities are used to adjust the forecasted cash balance.

Statement of Cash Flows

Cash generated by operations Answer

Cash used for investing Answer

Cash used for financing Answer

Total change in cash Answer

Cash at beginning of period Answer

Cash at end of period Answer