Assignment
Carefully work through the analysis of the company's short term financial situation. You will see that the company will be in a negative cash situation three quarters from now. As an adviser to the company you are asked to make recommendations to management on what they actions they could take to avoid the coming financial crisis.
Your paper should:
a. List the options open to the company.
b. State your recommendations
c. Explain clearly why you are making each recommendation and,
d. Present a revised cash budget showing what it the company's cash outlook will be as a result of your recommendations.
All submissions must be in proper APA 3 pg minimum format.
Cash Balance for Masson Corporation. The Masson Corporation has a 60-day average collection period and wishes to maintain a $5 million minimum cash balance. Based on this and the information below, complete the following cash budget. What conclusions do you draw?
|
MASSON CORPORATION
Cash Budget
(in millions)
|
|
|
QI
|
Q2
|
Q3
|
Q4
|
|
Beginning receivables
|
$120
|
|
|
|
|
Sales
|
90
|
$120
|
$150
|
$120
|
|
Cash colleclions
|
|
|
|
|
|
Ending receivables
|
|
|
|
|
|
Total cash collections
|
|
|
|
|
|
Tolal cash clistAirsernenis
|
80
|
160
|
180
|
160
|
|
Net cam inllow
|
|
|
|
|
|
Beginning cash balance
|
$ 5
|
|
|
|
|
Not cosh inflow
|
|
|
|
|
|
Ending cash balance
|
|
|
|
|
| Minimum cash balance |
|
|
|
|
|
Comulalive surplus {deficit)
|
|
|
|
|