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You are required to: 1. Explain Cash Budget 2. Prepare Cash budget for Company 3. Interpret the Results 4. Give your recommendation for Credit Policy of Company. 5. What do you think about company's Cash or Liquid Position? 6. How company can increase its liquidity? 191) 40 41 Cash budget is a summary of cash receipts and cash payments over a specific period of times. This budget tells whether the company has sufficient ashto operate or not 132 44 45 46 4 48 Saudi Agricultural Company Cash Budget For the Three monthsending April February March April 5000 49 18000 68000 3000 24000 72000 50 51 0000 3000 48000 205.00 48000 53 54 55 50 57 30 Opening Balance of Cash Add Cash receipts Cash Sales 10 Collected in the next month interest income Total Cash Available Less Disbursements Payment to suppliers Payment for Wages Payment for Overheads Rent expense Advance Income Tax Paid Hent expense Advance Income Tax Paid Bonus Purchase of Total Disbursements 52000 21000 15000 2000 OCCO 34000 25000 13500 35000 1500 30000 6500 10000 57 50 59 60 68 62 60 64 65 66 67 Company's Liquidity position is very poor it has to change iti credit policy Cash budget is a summary of cash receipts and cash payments over a specific period of times. This budget tells whether the company has sufficient cash to operate or not. Saudi Agricultural Company Cash Budget For the Three months ending April 30 February March April 5000 -50000 -51500 39 1) 40 41 42 432) 44 45 46 47 48 49 50 51 52 53 54 55 56 57 24000 72000 26000 96000 18000 68000 3000 94000 46000 70500 52000 Opening Balance of Cash Add Cash receipts Cash Sales 80% Collected in the next month Interest Income Total Cash Available Less Disbursements Payment to Suppliers Payment for Wages Payment for Overheads Rent expense Advance Income Tax Paid Rent expense Advance Income Tax Paid Bonus Purchase of Plant Total Disbursements Ending Balance 48000 10000 13500 1000 11000 15000 1000 60000 14000 16000 1000 15000 58 1000 1000 1000 15000 57 58 59 60 61 62 63 64 65 66 10000 61500 144000 -50000 18500 97500 -51500 106000 -35500 Company's Liquidity position is very poor.It has to change its credit policy. 67 68 Month: Feb- Month: Mar- Month: Apr- 20 20 5,000 -50,000 -51,500 20 18,000 68,000 24,000 72,000 26,000 96,000 ole 1) able 4) 3,000 0 0 94,000 46,000 70,500 48,000 2) t month) 10,000 onth) 13,500 1,000 0 10,000 52,000 11,000 15,000 1,000 0 60,000 14,000 16,000 1,000 15,000 0 0 61,500 18,500 1,44,000 97,500 1,06,000 -50,000 -51,500 -35,500 You are required to: 1. Explain Cash Budget 2. Prepare Cash budget for Company 3. Interpret the Results 4. Give your recommendation for Credit Policy of Company. 5. What do you think about company's Cash or Liquid Position? 6. How company can increase its liquidity? 191) 40 41 Cash budget is a summary of cash receipts and cash payments over a specific period of times. This budget tells whether the company has sufficient ashto operate or not 132 44 45 46 4 48 Saudi Agricultural Company Cash Budget For the Three monthsending April February March April 5000 49 18000 68000 3000 24000 72000 50 51 0000 3000 48000 205.00 48000 53 54 55 50 57 30 Opening Balance of Cash Add Cash receipts Cash Sales 10 Collected in the next month interest income Total Cash Available Less Disbursements Payment to suppliers Payment for Wages Payment for Overheads Rent expense Advance Income Tax Paid Hent expense Advance Income Tax Paid Bonus Purchase of Total Disbursements 52000 21000 15000 2000 OCCO 34000 25000 13500 35000 1500 30000 6500 10000 57 50 59 60 68 62 60 64 65 66 67 Company's Liquidity position is very poor it has to change iti credit policy Cash budget is a summary of cash receipts and cash payments over a specific period of times. This budget tells whether the company has sufficient cash to operate or not. Saudi Agricultural Company Cash Budget For the Three months ending April 30 February March April 5000 -50000 -51500 39 1) 40 41 42 432) 44 45 46 47 48 49 50 51 52 53 54 55 56 57 24000 72000 26000 96000 18000 68000 3000 94000 46000 70500 52000 Opening Balance of Cash Add Cash receipts Cash Sales 80% Collected in the next month Interest Income Total Cash Available Less Disbursements Payment to Suppliers Payment for Wages Payment for Overheads Rent expense Advance Income Tax Paid Rent expense Advance Income Tax Paid Bonus Purchase of Plant Total Disbursements Ending Balance 48000 10000 13500 1000 11000 15000 1000 60000 14000 16000 1000 15000 58 1000 1000 1000 15000 57 58 59 60 61 62 63 64 65 66 10000 61500 144000 -50000 18500 97500 -51500 106000 -35500 Company's Liquidity position is very poor.It has to change its credit policy. 67 68 Month: Feb- Month: Mar- Month: Apr- 20 20 5,000 -50,000 -51,500 20 18,000 68,000 24,000 72,000 26,000 96,000 ole 1) able 4) 3,000 0 0 94,000 46,000 70,500 48,000 2) t month) 10,000 onth) 13,500 1,000 0 10,000 52,000 11,000 15,000 1,000 0 60,000 14,000 16,000 1,000 15,000 0 0 61,500 18,500 1,44,000 97,500 1,06,000 -50,000 -51,500 -35,500