Based on your projections for the four quarters of 2023, indicate (1) whether new bank borrowing (open line of credit) will be needed and (2) if borrowing is needed, when does the need start occurring and what is the maximum amount needed?

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 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 capital lease of tools and equipment (warehouse facilities 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 Q3 $ 0.85 Q4 $0.90 Total $ 3.00 1 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 operating 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%. a. Prepare quarterly purchase budget for Q1, Q2, Q3, and for Q4 ending December 31, 2022 Assume that forecasted sales for the first quarter of 2023 = $1.2 million. b. Prepare quarterly general, administration and selling budget for Q1, 02, 03, and for Q4 ending December 31, 2022. Prepare quarterly cash budget for Q1, Q2, Q3, and for Q4 ending December 31, 2022. d. Prepare the pro forma income statement for the year ending December 31, 2022. e. Prepare the end of the year 2022 pro forma balance sheet. f. Based on your projections for the four quarters of 2023, indicate (1) whether new ba (open line of credit) will be needed and (2) if borrowing is needed, when does the occurring and what is the maximum amount needed? & 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 eve during 2022 Mc Serah should be interested in knowing whether AC L! 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 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 capital lease of tools and equipment (warehouse facilities 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 Q3 $ 0.85 Q4 $0.90 Total $ 3.00 1 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 operating 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%. a. Prepare quarterly purchase budget for Q1, Q2, Q3, and for Q4 ending December 31, 2022 Assume that forecasted sales for the first quarter of 2023 = $1.2 million. b. Prepare quarterly general, administration and selling budget for Q1, 02, 03, and for Q4 ending December 31, 2022. Prepare quarterly cash budget for Q1, Q2, Q3, and for Q4 ending December 31, 2022. d. Prepare the pro forma income statement for the year ending December 31, 2022. e. Prepare the end of the year 2022 pro forma balance sheet. f. Based on your projections for the four quarters of 2023, indicate (1) whether new ba (open line of credit) will be needed and (2) if borrowing is needed, when does the occurring and what is the maximum amount needed? & 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 eve during 2022 Mc Serah should be interested in knowing whether AC L