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Pro Forma cash flow , income statement , and balane state ending in 3 month Two product lines Product A Sales Price = $70 per

Pro Forma cash flow , income statement , and balane state ending in 3 month

  • Two product lines
    • Product A
      • Sales Price = $70 per unit
      • Costs = $50 per unit
      • Half of costs are paid in the current period and half the following month
    • Product B
      • Sales Price = $100 per unit
      • Costs = $70 per unit
      • Half of costs are paid in the current period and half the following month
  • Beginning Inventory
    • 5,000 units of product A
    • 5,000 units of product B
    • Cost of sales on LIFO basis (accounting adjustment made at the end of each quarter)
  • Sales Schedule
    • Month 1 = 10,000 units of A; 10,000 units of B
    • Month 2 = 15,000 units of A; 20,000 units of B
    • Month 3 = 15,000 units of A; 25,000 units of B
  • Other Cash Outflows
    • S,G&A = $150,000 per month
    • Quarter end dividend of $250,000
    • CAPEX expenditure of $200,000 in month 2
  • Other Assumptions
    • Sales collected
      • 40% month of sale
      • 30% following month
      • 30% month after that
    • Beginning A/R collected $125k in month 1 and $125k in month 2
    • Opening A/P balance paid in month 1
    • Even production schedule
    • Target ending inventory at end of quarter = 50% of previous months sales
    • Minimum Cash Balance = $100,000
    • Income Tax Rate = 20%
    • Long-term Debt interest = 5.5%
    • Line of Credit interest rate (if you need to borrow) = 30 day LIBOR (0.50%) plus 350 basis points interest paid on previous months ending balance.

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