explain what this implies about firm cash needs and what would the firm do about the deficit? -258M

Using the result in 4A (cumulative surplus or deficit), explain what this implies about firm cash needs? What would the firm do about the surplus or deficit? Pet Treats, Inc. specializes in gourmet pet treats and receives all income from sales and has the following account details: Last year's ending payables and receivables were $125M and $250M, respectively, while the cash balance was $80M. Historically, the average receivables turnover ratio has been 6.0833, while the average payables period has been 45 days. Recently, purchases have been approximately one half of sales but are purchased a quarter in advance. The firm likes to maintain a minimum balance of $50M. Other relevant expenses include the following: Wages, taxes, and other expense are 30% of sales, Interest and dividend payments are $50M, and a major capital expenditure of $200M is expected in the second quarter. The following sales estimates are projected: Sales estimates (in millions): Q1=500;Q2=600;Q3=650;Q4=800; Q1 next year =550 What is the cumulative surplus or deficit for quarter three? Round to the nearest million dollars and indicate whether it is a surplus or deficit using the sign. Required notes: Account receliable turnover =4.0833 Account reseivables perad cos33365=codays ench quarter has dauss. So 2/3 of current ouator sales will be collected in hext ovarter and 1/3 of current quarter will be callected in current quarter only. So cash procoeds 2/3 of previou quarter soles +1/3 ofcurrent Quantrs saley InQ1=Q2Q3250m+31(500)=46.67=2/3(500)+1/3(600)=533.332/3(600)+1/3(690)=516.67 Average poyables poriad: 4r dams: 90 deas in cuarter pouments. 1/2 of previous Quanter pabchasis +1/2 of Current Quarter purchaps purchares =21 of next Quarter salos purchass a1=1/2[500]=300Q2=1/2[650]=35a3=1/2[300]=4004=1/2[550]=225 payments =21 of periour quartor purchor +1/2 of current quonter pun Ina1=125+21[300]=275InQ2=1/2[200]+k2[32r]=3125InQ3=12[205]+k2[400)=362.5InQ4=k2[400]+k4[150]=338.75