Short-Term Financial Planning

Cash start 1st quarter: 20.3

Sales 4th quarter last year: 250

Collections on sales in the current period: 50%

Collections on sales in previous period: 50%

Minimum operating balance: 20.0

Quarter	1st	2nd	3rd	4th
Sales	130	180	120	400
Payments of accounts payable	60	50	80	50
Increase in inventory	40	40	45	50
Labor & other expenses	30	30	30	30
Capital expenses	100	10	10	10
Taxes, interest, and dividends	20	20	20	20

Sources of short-term financing:

Bank loan -> Up to 50. Interest 2% per quarter

Stretching payables -> Up to 50. Loses 4% on discounts. Has to pay next quarter

Sell marketable securities -> Value 25. Loses 3% on dividends