Assignment:
1) You have been provided with a financial forecast spreadsheet through October. The spreadsheet contains the initial forecast numbers that you will use as your baseline forecast. The template does not have formulas in it so you should populate the spreadsheet with formulas so that you can perform the "what if" modeling required in the assignment. Use the template as it is designed to provide all the financial information needed for the assignment. The spreadsheet should include the twelve months from January through December.
2) Note that the original forecast had cash flow shortfalls in most months. A business cannot operate if it has overdrawn on its bank account, just like you cannot overdraw on your bank account/credit card for an extended period. So when you are addressing the cash deficits discussed below, remember you need to eliminate deficits in all months.
2) Revise the projections as suggested below and answer the related questions (remember you are in March:
A) How much would you have to raise prices to eliminate the cash deficit projected in the information supplied? Rerun budget to determine this.
B) How much slower would Fun & Games have to grow to avoid a cash deficit? (What is their internal sustainable rate of growth?)
C) In an effort to quickly build the company size, sell it and take a one-year vacation in Tahiti, you decide to increase sales to 8000 units per month by September. How much cash will be needed and can this be raised by a combination of faster customer collections, slower vendor payments, negotiating a lower product cost, and reduced inventory levels?Suggest one specific scenario that will finance this growth without borrowing or obtaining equity financing.
Attachment:- Fun & Games Company.rar