An analysis of the cash conversion cycle should also help Alma Serah understand what has been happening to the operations of ALMA.com. Prepare an analysis of the conversion periods for the three components of the cash conversion cycle for 2022. Explain what has happened in terms of each component of the cycle during 2022. Ms. Serah should be interested in knowing whether ALMA.com. has been building or burning cash. Comment on the cash build, cash burn, and the net cash build/burn position for 2022.

ALMA.com is an e-commerce Service for teenagers video games, television programs, other material, intended to be both educational and enjoyable luble roduct information and detailed view comments are combined with a wide selection of products for purchase to help families make the children's educational and entertainment decision. A tem of leading educators and experts provide reviews and comments on the products sold by the fam. ALMA.com tapets highly ducated. convenience Oriented, and value conscious families with children under the age of Sheer, estimated to be about 40 percent of wernetsers. The firm in warehouse distribution model and channels that stems higher nut margin, as well as greater selection and convenience for customers, when compared to traditional retailers and competitors Venture Capital of SIM was obtained to start up operation in 2021; a second round of venture financing of $0.14M (capital ease of waruhoute facilities helped AMA.com to move through its survival stage. Because of relatively high marketing expenditures aimed at gaining market share the firm expected to suffer net beses for the first two year: 2023 and 2022. However, nee profit margintare expected to average 12% per year beginning in year 2023 The management teams headed by M. Ama Seral, who serves as the president of the venture and controls about 35of the owner of the fum Me Serah has more than twenty wars of experience in high tech Industries, including provit poison with prestigious Corporation such as Microsoft She holds a Bachelor Degree in Electrical Engineering and Master Degree in Computer Engineering from 10 educational institutions in the world. Nelmarad, director of technology, has more than twelve years of experience in software development and integration. Dans com has almost ten years of experience in business development and sales in the software industry. Salma Norma, director of marketing was responsible for the marketing communication function and meet operation of a large software company for nine years. Management strives for continual improvement in case of user interface personalized service, and amount of information supplied to customers AIMA.com batance sheets of the end of 2021 is expected to be as fotos ALMA.com Balance Sheets of December 31, 2021 din Millions) 0.15 pale 0.12 Account cuvate 04 Inventories 031 Netf 2014 out 100 $131 Totale and After discussions with the company's marketing manager and finance manager sales over eich Quarter of 2022 are forced to be Quarter Sale Forecast in Millions) 01 2 SOS 04 5.0.20 Total 53.00 $0. 1 All sales are made on creditor of net says and are collected the following quarter. No bad debts are antipated the counts rechable on the bace sheet at the end of 2021 thus will be collected in Quarter 1, 2022. Quarter 1, 2022 sale will be collected in Quarter, and soon Inwentary on and represents an operating level balety stock, which the company onds to maintain AIMA.com's policy is to maintaining intory at the end of each quarters to 30 of rexturespected sole Purchased in the everter and go in the net quarter. Cost of goods sold averages 10% of sales to profama 30 General Administration and Seline cooh penes were tox of sales. Depreciation SOOM perQuarter. The annual trest rate on outstanding tease by interest expense is paid Quarterly Alma Serahemes are read outerly and the income Late is for budgeting purposes The capital tease wait.M por Year 10 There are no additional capital expenditures planned turing 2022, and to cut payouts will be paid. The company's desired and Quarter minimum chance SOSM MI Seropes to meet shorties during the period by an agreed $0.15M openline of credit with the bankat 4%. Prepare quately purchase budget for Q1, 0203. ned for sending December 31, 2022 Assume that forecasted sales for the festuarter of 2023 $12 milion Prepare a generat admiration and budget for 01, 2, and December 31, 2022 Prepare qualche budget for 1, 02, 03, and for 04 and December 31, 2002 Prepare the pro forma income statement for the year ending December 31, 2022 Prepare for the year: 2022 pro forma balance sheet Based on your projections for the four Quarters of 2023, indicate it) whether new bank borowing fopen fine of credit wil bed and borrowing needed when does the need start occurring and what is the maximum amount needed? An analysis of the cash bhunderstand what has been ond ALMA.com is an e-commerce service for teenagers' video games, television programs, and other material, intended to be both educational and enjoyable. Valuable product information and detailed review comments are combined with a wide selection of products for purchase to help families make their children's educational and entertainment decisions. A team of leading educators and experts provide reviews and comments on the products sold by the firm. ALMA.com targets highly educated, convenience- oriented, and value-conscious families with children under the age of fifteen, estimated to be about 40 percent of Internet users. The firm is using a warehouse distribution model and channels that stems higher net margins, as well as greater selection and convenience for customers, when compared to traditional retailers and competitors. Venture capital of $1M was obtained to start up operations in 2021; a second round of venture financing of $0.14M (capital lease of warehouse facilities) helped ALMA.com to move through its survival stage. Because of relatively high marketing expenditures aimed at gaining market share the firm is expected to suffer net losses for the first two years 2021 and 2022. However, net profit margins are expected to average 12% per year beginning in Year 2023. The management team is headed by Ms. Alma Serah, who serves as the president of the venture and controls about 35% of the ownership of the firm, Ms. Serah has more than twenty years of experience in high-tech industries, including previous positions with prestigious corporations such as Microsoft. She holds a Bachelor Degree in Electrical Engineering and a Master Degree in Computer Engineering from top educational institutions in the world. Nelma Bradman, director of technology, has more than twelve years of experience in software development and integration. Dalma Loman has almost ten years of experience in business development and sales in the software industry. Salma Norman, director of marketing was responsible for the marketing communications function and the Internet operations of a large software company for nine years. Management strives for continual improvement in ease of user interface, personalized services, and amount of information supplied to customers. ALMA.com balance sheet as of the end of 2021 is expected to be as follows: ALMA.com Balance Sheet as of December 31, 2021 (In Millions) Cash 0.15 Accounts payable 0.17 Accounts receivable 0.47 Capital Lease Liability 0.14 Inventories 0.55 Total Liabilities 0.31 Net fixed assets 0.14 Equity 1.00 Total assets $1.31 Total Liabilities and Equity $1.31 Represents the capitalisase of cock and equipment warehouse fool After discussions with the company's marketing manager and finance manager, sales over each quarter of 2022 are forecasted to be: Quarter Sales Forecast (in Millions) Q1 $0.50 Q2 $0.75 a3 $ 0.85 04 $0.90 Total $ 3.00 All sales are made on credit terms of net 90 days and are collected the following quarter. No bad debts are anticipated. The accounts receivable on the balance sheet at the end of 2021 thus will be collected in Quarter 1, 2022. Quarter 1, 2022 sales will be collected in Quarter 2, and so on. Inventory on hand represents a minimum aperating level (safety stock), which the company intends to maintain. ALMA.com's policy is to maintain ending inventory at the end of each quarter equals to 30% of next quarter's expected sales. Purchases are paid 60% in the same quarter and 40% in the next quarter, Cost of goods sold averages 70% of sales (gross profit margin 30%). General Administration and Selling cash expenses average 10% of sales, Depreciation is $0.01M per Quarter. The annual interest rate on outstanding lease liability is 5%. Interest expense is paid quarterly. Ms Alma Serah assumes taxes are paid quarterly and the income tax rate is 40% for budgeting purposes The capital lease installment is 0.08M per Year (0.02 per quarter). There are no additional capital expenditures planned during 2022, and no equity payouts will be paid. The company's desired end-of- quarter minimum cash balance is $0.15M. Ms Serah hopes to meet any cash shortages during the period by an agreed $0.15M open line of credit with the bank at 4%. ALMA.com is an e-commerce Service for teenagers video games, television programs, other material, intended to be both educational and enjoyable luble roduct information and detailed view comments are combined with a wide selection of products for purchase to help families make the children's educational and entertainment decision. A tem of leading educators and experts provide reviews and comments on the products sold by the fam. ALMA.com tapets highly ducated. convenience Oriented, and value conscious families with children under the age of Sheer, estimated to be about 40 percent of wernetsers. The firm in warehouse distribution model and channels that stems higher nut margin, as well as greater selection and convenience for customers, when compared to traditional retailers and competitors Venture Capital of SIM was obtained to start up operation in 2021; a second round of venture financing of $0.14M (capital ease of waruhoute facilities helped AMA.com to move through its survival stage. Because of relatively high marketing expenditures aimed at gaining market share the firm expected to suffer net beses for the first two year: 2023 and 2022. However, nee profit margintare expected to average 12% per year beginning in year 2023 The management teams headed by M. Ama Seral, who serves as the president of the venture and controls about 35of the owner of the fum Me Serah has more than twenty wars of experience in high tech Industries, including provit poison with prestigious Corporation such as Microsoft She holds a Bachelor Degree in Electrical Engineering and Master Degree in Computer Engineering from 10 educational institutions in the world. Nelmarad, director of technology, has more than twelve years of experience in software development and integration. Dans com has almost ten years of experience in business development and sales in the software industry. Salma Norma, director of marketing was responsible for the marketing communication function and meet operation of a large software company for nine years. Management strives for continual improvement in case of user interface personalized service, and amount of information supplied to customers AIMA.com batance sheets of the end of 2021 is expected to be as fotos ALMA.com Balance Sheets of December 31, 2021 din Millions) 0.15 pale 0.12 Account cuvate 04 Inventories 031 Netf 2014 out 100 $131 Totale and After discussions with the company's marketing manager and finance manager sales over eich Quarter of 2022 are forced to be Quarter Sale Forecast in Millions) 01 2 SOS 04 5.0.20 Total 53.00 $0. 1 All sales are made on creditor of net says and are collected the following quarter. No bad debts are antipated the counts rechable on the bace sheet at the end of 2021 thus will be collected in Quarter 1, 2022. Quarter 1, 2022 sale will be collected in Quarter, and soon Inwentary on and represents an operating level balety stock, which the company onds to maintain AIMA.com's policy is to maintaining intory at the end of each quarters to 30 of rexturespected sole Purchased in the everter and go in the net quarter. Cost of goods sold averages 10% of sales to profama 30 General Administration and Seline cooh penes were tox of sales. Depreciation SOOM perQuarter. The annual trest rate on outstanding tease by interest expense is paid Quarterly Alma Serahemes are read outerly and the income Late is for budgeting purposes The capital tease wait.M por Year 10 There are no additional capital expenditures planned turing 2022, and to cut payouts will be paid. The company's desired and Quarter minimum chance SOSM MI Seropes to meet shorties during the period by an agreed $0.15M openline of credit with the bankat 4%. Prepare quately purchase budget for Q1, 0203. ned for sending December 31, 2022 Assume that forecasted sales for the festuarter of 2023 $12 milion Prepare a generat admiration and budget for 01, 2, and December 31, 2022 Prepare qualche budget for 1, 02, 03, and for 04 and December 31, 2002 Prepare the pro forma income statement for the year ending December 31, 2022 Prepare for the year: 2022 pro forma balance sheet Based on your projections for the four Quarters of 2023, indicate it) whether new bank borowing fopen fine of credit wil bed and borrowing needed when does the need start occurring and what is the maximum amount needed? An analysis of the cash bhunderstand what has been ond ALMA.com is an e-commerce service for teenagers' video games, television programs, and other material, intended to be both educational and enjoyable. Valuable product information and detailed review comments are combined with a wide selection of products for purchase to help families make their children's educational and entertainment decisions. A team of leading educators and experts provide reviews and comments on the products sold by the firm. ALMA.com targets highly educated, convenience- oriented, and value-conscious families with children under the age of fifteen, estimated to be about 40 percent of Internet users. The firm is using a warehouse distribution model and channels that stems higher net margins, as well as greater selection and convenience for customers, when compared to traditional retailers and competitors. Venture capital of $1M was obtained to start up operations in 2021; a second round of venture financing of $0.14M (capital lease of warehouse facilities) helped ALMA.com to move through its survival stage. Because of relatively high marketing expenditures aimed at gaining market share the firm is expected to suffer net losses for the first two years 2021 and 2022. However, net profit margins are expected to average 12% per year beginning in Year 2023. The management team is headed by Ms. Alma Serah, who serves as the president of the venture and controls about 35% of the ownership of the firm, Ms. Serah has more than twenty years of experience in high-tech industries, including previous positions with prestigious corporations such as Microsoft. She holds a Bachelor Degree in Electrical Engineering and a Master Degree in Computer Engineering from top educational institutions in the world. Nelma Bradman, director of technology, has more than twelve years of experience in software development and integration. Dalma Loman has almost ten years of experience in business development and sales in the software industry. Salma Norman, director of marketing was responsible for the marketing communications function and the Internet operations of a large software company for nine years. Management strives for continual improvement in ease of user interface, personalized services, and amount of information supplied to customers. ALMA.com balance sheet as of the end of 2021 is expected to be as follows: ALMA.com Balance Sheet as of December 31, 2021 (In Millions) Cash 0.15 Accounts payable 0.17 Accounts receivable 0.47 Capital Lease Liability 0.14 Inventories 0.55 Total Liabilities 0.31 Net fixed assets 0.14 Equity 1.00 Total assets $1.31 Total Liabilities and Equity $1.31 Represents the capitalisase of cock and equipment warehouse fool After discussions with the company's marketing manager and finance manager, sales over each quarter of 2022 are forecasted to be: Quarter Sales Forecast (in Millions) Q1 $0.50 Q2 $0.75 a3 $ 0.85 04 $0.90 Total $ 3.00 All sales are made on credit terms of net 90 days and are collected the following quarter. No bad debts are anticipated. The accounts receivable on the balance sheet at the end of 2021 thus will be collected in Quarter 1, 2022. Quarter 1, 2022 sales will be collected in Quarter 2, and so on. Inventory on hand represents a minimum aperating level (safety stock), which the company intends to maintain. ALMA.com's policy is to maintain ending inventory at the end of each quarter equals to 30% of next quarter's expected sales. Purchases are paid 60% in the same quarter and 40% in the next quarter, Cost of goods sold averages 70% of sales (gross profit margin 30%). General Administration and Selling cash expenses average 10% of sales, Depreciation is $0.01M per Quarter. The annual interest rate on outstanding lease liability is 5%. Interest expense is paid quarterly. Ms Alma Serah assumes taxes are paid quarterly and the income tax rate is 40% for budgeting purposes The capital lease installment is 0.08M per Year (0.02 per quarter). There are no additional capital expenditures planned during 2022, and no equity payouts will be paid. The company's desired end-of- quarter minimum cash balance is $0.15M. Ms Serah hopes to meet any cash shortages during the period by an agreed $0.15M open line of credit with the bank at 4%