Kelly’s Boutique Cash Budget
1st Qtr.
2nd Qtr. 3rd Qtr. 4th Qtr. Year
Operating activities
Operating cash receipts
Product sales revenue 40,000 40,800 41,616 42,448 164,864
Collections in the quarter of sale 32,000 32,640 33,293 33,959 131,891
Collections in the 1st quarter following a sale 4,200 6,000 6,120 6,242 22,562
Collections in the 2nd quarter following a sale 1,500 1,400 2,000 2,040 6,940
Expenses
Advertising expense 900 900 900 900 3,600
Interest expense 1,000 1,000 1,000 1,000 4,000
Payroll expense 8,000 8,000 8,000 8,000 32,000
Supplies expense 500 500 500 500 2,000
Utilities expense 600 600 600 600 2,400
Operating cash payments 36,552 34,012 34,339 36,775 141,677
Cash from (to) operating activities 1,148 6,028 7,074 5,467 19,717
Cash from (to) investing activities – – (200,000) – (200,000)
Loan proceeds 200,000 200,000
Operating cash receipts 37,700 40,040 41,413 42,241 161,394
Operating cash payments
Purchases
Cost of expected sales 22,000 22,440 22,889 23,347 90,675
Required ending inventory 15,708 16,022 16,343 19,250 19,250
Beginning inventory (11,000) (15,708) (16,022) (16,343) (11,000)
Payments in the 1st quarter following a purchase 2,000 2,671 2,275 2,321 9,267
Payments in the 2nd quarter following a purchase 850 1,000 1,335 1,138 4,323
Cash payments for purchases 25,552 23,012 23,339 25,775 97,677
Loan payments (4,200) (4,200) (8,400)
Cash from (to) financing activities – 200,000 (4,200) (4,200) 191,600
Change in cash 1,148 206,028 (197,126) 1,267 11,317
Beginning cash 15,000 16,148 222,176 25,050 15,000
Assumptions
First quarter sales 40,000
Sales growth each quarter 102%
Collections in the quarter of sale 80%
Payments in the quarter of purchase 85%
Payments in the 1st quarter following a purchase 10%
Payments in the 2nd quarter following a purchase 5%
Purchases in the previous year’s 4th quarter 20,000
Purchases in the previous year’s 3rd quarter 17,000
Beginning cash 15,000
Next year’s 1st qtr. forecasted sales 50,000
Advertising expense 900
Depreciation expense 800
Interest expense 1,000
Payroll expense 8,000
Supplies expense 500
Utilities expense 600
Loan proceeds 200,000
Loan payment 4,200
Equipment purchase 200,000
Collections in the 1st quarter following a sale 15%
Collections in the 2nd quarter following a sale 5%
Previous years 4th quarter sales 28,000
Previous years 3rd quarter sales 30,000
Cost of expected sales 55%
Required ending inventory 70%
Beginning inventory 11,000