Question 6

Palladium Ltd. is looking to update their cash budget for January to April time period. Based on the information below prepare the companies cash budget.

- Palladium Ltd is a new business that anticipates sales of $20,000 in January, with anticipated growth of 5% per month; the sales are 40% credit and 60% cash; all sales terms are net 60 days.

- COGS is 25% of sales; terms of purchase are 30 days

-Expenses are 35% of sales; paid in the month they are incurred

- In March, the company pays $25,000 cash for new equipment

- The opening cash balance is $5,000

- No minimum cash balance is required

What recommendations would you provide based on the results of this cash budget