Napoleon, Inc.
Sales Budget
For the 6 mos ending June '16
	Nov '15	Dec '15	Jan '16	Feb '16	Mar '16	Apr '16	May '16	June '16	6 mos total
Budged unit sales	11,250	11,600	10,000	11,400	12,000	15,600	18,000	22,000	89,000
Selling price per unit	$10.00	$10.00	$10.00	$10.00	$10.00	$10.00	$11.25	$11.25
Total Sales	$112,500	$116,000	$100,000	$114,000	$120,000	$156,000	$202,500	$247,500	940,000
Cash Sales %	30%
Credit Sales %	70%
Cash Sales	$33,750	$34,800	$30,000	$34,200	$36,000	$46,800	$60,750	$74,250	$282,000
Credit Sales	78,750	81,200	70,000	79,800	84,000	109,200	141,750	173,250	658,000
Total Sales	$112,500	$116,000	$100,000	$114,000	$120,000	$156,000	$202,500	$247,500	$940,000
Current month A/R Collections	30%
1 month prior A/R Collections	50%
2 months prior A/R Collections	16%
Uncollectible	4%
Napoleon, Inc.
Cash Collections
For the 6 mos ending June '16
	Jan '16	Feb '16	Mar '16	Apr '16	May '16	June '16	6 mos total
Current month cash Sales	30,000	34,200	36,000	46,800	60,750	74,250	$282,000
Current month A/R Collections	21,000	23,940	25,200	32,760	42,525	51,975	$197,400
1 month prior A/R Collections	40,600	35,000	39,900	42,000	54,600	70,875	$282,975
2 months prior A/R Collections	12,600	12,992	11,200	12,768	13,440	17,472	$80,472
Total cash collections	$97,200	$110,808	$126,360	$157,464	$192,465	$235,224	$919,521
Bad Debt Expense	2,800	3,192	3,360	4,368	5,670	6,930	$26,320
Desired ending inventory %	50%
Napoleon, Inc.
Purchase Budget
For the 6 mos ending June '16
	Nov '15	Dec '15	Jan '16	Feb '16	Mar '16	Apr '16	May '16	June '16	6 mos total
Budged unit sales	11,250	11,600	10,000	11,400	12,000	15,600	18,000	22,000	$89,000
Add desired ending inventory	5,800	5,000	5,700	6,000	7,800	9,000	11,000	9,000	$9,000
Total needs	17,050	16,600	15,700	17,400	19,800	24,600	29,000	31,000	$98,000
Less Beginning Inventory		5,800	5,000	5,700	6,000	7,800	9,000	11,000	$5,000
Required Purchases		10,800	10,700	11,700	13,800	16,800	20,000	20,000	$93,000
Cost per unit		$4.00	$4.00	$4.00	$4.20	$4.20	$4.40	$4.40
Purchases		$41,700	$42,800	$48,800	$62,780	$73,530	$86,000	$88,150	$402,060
% Paid in Month of Purchase	40%
% Paid in Month after Purchase	60%
Napoleon, Inc.
Schedule of Budgeted Cash Disbursements for Merchandise Purchases
For the 6 mos ending June '16
	Jan '16	Feb '16	Mar '16	Apr '16	May '16	June '16	6 mos total
Cash purchases	$17,120	$19,520	$25,112	$29,412	$34,400	$35,260	$160,824
1 month prior A/P Collections	25,020	25,680	29,280	37,668	44,118	51,600	213,366
Cash disbursements for merchandise purch.	$42,140	$45,200	$54,392	$67,080	$78,518	$86,860	$374,190
Fixed Operating expenses:		Variable Operating Expenses:
Salaries and Wages	$3,000	Sales Commissions, % of Revenue			7%
Rent	8,000	Other Variable Cash Expenses, % of Revenue			6%
Supplies Expense	2,000
Other - Overhead	24,000
Other - Depreciation	24,000
Napoleon, Inc.
Operating Expense Budget
For the 6 mos ending June '16
	Jan '16	Feb '16	Mar '16	Apr '16	May '16	June '16	6 mos total
Salaries and Wages	$3,000	$3,000	$3,000	$3,000	$3,000	$3,000	$18,000
Sales Commissions	7,000	7,980	8,400	10,920	14,175	17,325	$65,800
Rent	8,000	8,000	8,000	8,000	8,000	8,000	$48,000
Other Variable Cash Expenses	6,000	6,840	7,200	9,360	12,150	14,850	$56,400
Supplies Expense	2,000	2,000	2,000	2,000	2,000	2,000	$12,000
Other - Overhead	24,000	24,000	24,000	24,000	24,000	24,000	$144,000
Other - Depreciation	24,000	24,000	24,000	24,000	24,000	24,000	$144,000
Bad Debt Expense	2,800	3,192	3,360	4,368	5,670	6,930	$26,320
Total operating expenses	76,800	79,012	79,960	85,648	92,995	100,105	$514,520
Depreciation and noncash items	24,000	24,000	24,000	24,000	24,000	24,000	$144,000
Bad Debt Expense	2,800	3,192	3,360	4,368	5,670	6,930	26,320
Cash disbursements for operating expenses	$50,000	$51,820	$52,600	$57,280	$63,325	$69,175	$344,200
Equipment payment - January	$50,000
Equipment payment - February	$30,000
Dividends - March	$12,000
Minimum Monthly Cash Budget	$15,000
Napoleon, Inc.
Cash Budget
For the 6 mos ending June '16
	Jan '16	Feb '16	Mar '16	Apr '16	May '16	June '16	6 mos total
Cash balance, beginning	$15,000	$15,060	$15,848	$15,216	$15,320	$44,933	$121,377
Add collections from customers	97,200	110,808	126,360	157,464	192,465	235,224	$919,521
Total cash available	112,200	125,868	142,208	172,680	207,785	280,157	1,040,898
Less disbursements:
Cash disbursements for merchandise purch.	42,140	45,200	54,392	67,080	78,518	86,860	374,190
Cash disbursements for operating expenses	50,000	51,820	52,600	57,280	63,325	69,175	344,200
Equipment purchases	50,000	30,000					$80,000
Dividends			12,000				$12,000
Total cash disbursements	142,140	127,020	118,992	124,360	141,843	156,035	$810,390
Excess of receipts over disbursements	(29,940)	(1,152)	23,216	48,320	65,942	124,122	$124,122
Financing:
Borrowing-note	45,000	17,000					$62,000
Repayments-note			(8,000)	(33,000)	(21,000)		$(62,000)
Total financing	45,000	17,000	(8,000)	(33,000)	(21,000)	-	-
Cash balance, ending	$15,060	$15,848	$15,216	$15,320	$44,942	$124,122	$124,122
Napoleon, Inc.
Budgeted Income Statement
For the 6 mos ending June '16
	Jan '16	Feb '16	Mar '16	Apr '16	May '16	June '16	Total
Sales, net	$100,000	$114,000	$120,000	$156,000	$202,500	$247,500	$940,000
Cost of goods sold:	40,000	45,600	48,000	62,400	72,000	88,000	356,000
Gross margin	$60,000	$68,400	$72,000	$93,600	$130,500	$159,500	$584,000
Total operating expenses	76,800	79,012	79,960	85,648	92,995	100,105	514,520
Net Income	$(16,800)	$(10,612)	$(7,960)	$7,952	$37,505	$59,395	$69,480

Given the financial statements above, please provide a summary report with the following template:

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Subject: January through June 2016 Budget

I have completed the budget for the first half of the next year and have produced the following analysis:

Issues and Problem Areas:

Summarize the key weaknesses in the proposed budget, given the established pricing, inventory, receivable, payable, dividend and cash management policies.

Strategies:

Propose at least 3 changes to current policies that will address the weaknesses which you have identified.

Describe your reasoning for the suggestions you are making. For example, if you suggest raising the sales price in the off-season, why do you think it would make sense to the customer to pay more in January for a chair less likely to be used in the winter.

Prepare at least 1 set of alternative budgets reflecting the outcomes of the strategies you are suggesting.

You must comment on the impact of your suggestions on cost structure, profitability and cash flows.

You must assess the risks associated with your strategies and recognize the influence one set of suggestions will have on other parts of the budget. For example, what affect will increasing the sales price have on sales volume? Would the impact be the same throughout the year? How would you increase the volume?

Try to incorporate some of the concepts we have covered so far in the class, such as contribution margin and break-even.

You should explain any strategies that you considered and rejected because they did not significantly improve the situation.

Conclusion

Provide a brief conclusion

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