Itsa Excel Sheet

8/7/2019 Itsa Excel Sheet

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Q 1) Monthly Cash Budget for 5 month period.

The estimated cash inflows and outflows for the media company for the specific period of time are given

as under:

Monthly cash budgets show that the available cash reserves for all the months can meet the unexpected

needs or take benefit of the business opportunities as they arise. The analysis shows that the financial

health of the firm is strong and can sustain the variable market demand.

Apr-11 May-11 Jun-11 Jul-11 Aug-11

Photography 1,000 1,000 1,000 1,000 1,000

shop 100% cash 4,500 6,000 10,500 8,000 9,000

Internet 15% cash 7,500 13,500 16,500 18,000 12,750

Internet 85% Installment 7,004 7,004

7,004 7,004 7,004

7,004 7,004 7,004 7,004

8,755 8,755 8,755 8,755 8,755

15,759 15,759 15,759 15,75919,261 19,261 19,261

21,012 21,012

14,884

Total Revenue Cash Inflow 42,767 66,026 85,783 98,791 102,421

Purchases -Film & Media 36,102 42,660 63,480 74,100 68,640

Photography - Overhead Cost 250 250 250 250 250

Wages 7,500 7,500 7,500 7,500 7,500

Website cost 1,863 2,951 3,714 4,490 4,621

Rent 6,000 6,000 6,000 6,000 6,000Insurance - - - - -

Misc Expense 2,138 3,301 4,289 4,940 5,121

Total Manufacturing & Operating Cash Outflows 53,854 62,663 85,233 97,279 92,132

Interest Paid/Received 83 67 30 41 43

Opening Cash 20,000 8,996 12,426 13,006 14,559

Closing Cash 8,996 12,426 13,006 14,559 24,891

Monthly Cash Budget


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Q

) Monthly Projected Income Statements

The monthly projected Income Statement for the given period of time is as under:

Income statement explains that business is profitable for the first three months goes down in the th

months and picks up in the 5th

month. Gross Profit resulting from comparatively less sales has reduced

in the th

month due to which the profitability has gone down for the specific month.

Apr-11 May-11 Jun-11 Jul-11 Aug-11

Internet Sales 50 000 90 000

0 000

0 000 85 000

Shop Sales

500 6 000 0 500 8 000 9 000

Photography Revenue 000 000 000 000 000

Opening Stock - Media & Film

7 300 69

0 86 760 9 60 67 680

Purchases - Media & Film 3 700 57 600 7 300 76 800 56

00

Closing Stock - Media & Film 69

0 86 760 9 60 67 680 75 600

COGS - Media & Film 0 880 39 960 66 900 0 80

8

80

Gross Profit

6 0 57 0

0 5

600 7 7 0

6 5 0

Photography - Overhead Cost 50 50 50 50 50

Wages 7 500 7 500 7 500 7 500 7 500

Website cost 56

6 5 5 6

0 6 53

358

Rent 6 000 6 000 6 000 6 000 6 000

Insurance

8

8

8

8

8

Depreciation 876 838 80 766 730

Misc Expense 7 5

800 6 0 5 6

00

700

Operating Expenses 33 5 7

35 8 87

757

Operating Profit 3

87 3 8 9 7 65 (567)

763

Interest (expense)/profit 67 30

3

9

Net Profit 3 55

3 8

9 7 06 (5 3)

8

Monthly Projected Income Statement, for the month ending


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Q ) Projected Balance Sheets for the period April to August

11

Q

)

i) total net profit from April to August varies with changes in cost of goods sold

30-Apr-11 31-May-11 30-Jun-11 31-Jul-11 31-Aug-11

Fixed assets 1

,

1

,

1

,

1

,

1

,

Depreciation

,

76

,91

6,716 8,

8

, 1

Net book value 91,924 90,086 88,284 86,518 84,788

Stoc 69,1

86,76

9 ,16

67,68

7 ,6

De tors 6

,8

8 9

,

77 1 , 99 16 ,868 16

,61

Pre paid insurance 1,7

1,

6 1,

8 1,

9

87

Cash

,

,8 1

Interest receiva le 67 11 119

Total current assets 131,739 216,797 226,182 270,459 237,206

Creditors

,1 8

,

98

8,918 1,618 9, 78

Overdraft 1,

,19

,87

Interest paya le 1

Total current liabilities 56,162 40,408 83,112 51,960 65,252

Net Assets 167,501 266,474 231,353 305,017 256,742

Share capital 1

,

1

,

1

,

1

,

1

,

Retained profit 1

,9 9 1 6,

8 16 ,7 7 16 ,819 18

,7

Equity 204,939 236,448 263,727 262,819 284,702

Balance Sheet, as at

!

" #

,# # #

)

$

" #

,# # #

% #

,

# # #

6#

,# # #

8#

,# # #

1# #

,# # #

1" #

,# # #

COGS $ Media&

Film

Net Profit


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ii) Closing cash in August

Closing cash in August is'

5( ) ) )

which indicate that the company can leverage any future opportunity

for investment.

b) Brief report to the finance director of Image Select Media explaining your findings.

Profitability as represented by NP margin and0

OE is high in the first1

months falling sharply to a loss in

fourth month but recovering thereafter. Low closing inventory in anticipation of low sales in August

resulted in high COGS in July ( reducing the gross margin and finally resulting in a net loss.

Current ratio of the company is healthy representing that it can take care of its short term obligations as

the company has the closing cash.

2

534 4 4

14

3

4 4 4

1534 4 4

5 4

3

4 4 4

5

534 4 4

6 4

3

4 4 4

Apr2 11 May 2 11 Jun2 11 Jul2 11 Aug2 11

C os g Cas

Closing Cash

F7 8

a8 9 7

a@ A

aB

7 oC

8 a @D

s 7 sC

E F

G

H H Ia

D

G

H H

P

Q 8

G

H H

P

Q @

G

H H

C

Q gGH H

NP MarginR

S .R R

T

U S.

V

U

T

S S. U

WT

X

Y

.R

1T

S S.

W

T

a OE 11.R W

T

1 U .R

5T

1Y

. U 1T

X

Y

. SY

T

b . 5T

Current a atio 5.5W R

.V

R

.V W R

.V

U . 5

c

otal Assetc

urnoverY

. SR

Y

. UR

Y

.U b

Y

. UV

Y

.S b


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Since the company does not have long term debt it has low financial leverage. d urthermore due to

relatively less fixed assets as compared to total assetse the company also has low operating leverage.

Brief

Reg ort:

The excel format development was started with the Income Statement format. Sales over the internet

for Januarye

debruary and March

h i

11 were p i e i i i

each month. Outlet sales in March were p i i i

.

Internet e shop and photography sales were plotted in the income part of the statement.

In order to calculate the Gross profite cost of goods sold q COGS) was calculated. This calculation was

done by adding the opening stock and purchases and subtracting closing stock. Purchases were

calculated by multiplyingi

.r

by the value they are sold for before any supplementqie cost of goods sold

=r i s

of basic sales value). Closing stock at the end of each month is equal to 1h i s

of the cost of media

forecast to be sold the following month

The operating expenses included Photographyt

Overhead CosteWages

eWebsite

e

uent

eInsurance

e

Depreciation and Misc Expense. Photography cost was calculated by taking h 5 s of the revenue received

from it. Web related cost was charged by taking the commission on 5s of sales. The firm that designede

hosts and maintains Image Select Medias website does not charge directly for these services but

instead charge a commission of 5s

on all sales made via the internetqincluding on any supplement

charged for installment arrangements). The commission is regarded as an expense of the month the sale

takes place but the commission is paid in the month q s) Image Select Media receives the receipts from

those sales. i.e. commission is paid in the month of sale for sales paid in full and is paid on receipt of

each installment for installment sales. Depreciation ofh s

q of opening net book value) is charged each

month on a reducing balance basis.


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Difference of operating expenses and gross profit gave operating profit. Then Net Income was calculated

after adjusting interest amount.

Net Profit for the first three months was positive as the sales were good but fall in the fourth month due

to the huge amount of opening stock. Profit again showed positive value in the fifth month due to a

boost in sales.

Then Monthly cash budget was calculated by taking the difference of monthly cash inflows and

outflows. Cash inflows were calculated by adding cash flows from the following item sales:

y Photographyy Shop 1

v v w

cash

y Internet 15x cashy Internet y 5 Installment

Total cash outflows were calculated by adding the following cost items:

yPurchases

ilm

Media

y Photography Overhead Costy Wagesy Website costy Renty Insurancey Misc Expense

The difference of the two was then adjusted with interest and opening cash to give closing cash amount.

Interest is earned monthly on positive cash balances at the rate of

per annum.


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Interest is charged monthly on overdrafts at the rate of 1

per annum

In both cases interest is calculated on the closing cash balance before interest and is regarded as income

or expense of that month but is not received or paid until the following month.

The closing cash amount showed that the company has got enough cash to invest. This means that the

company can take other projects which can add to its bottom line.

Balance sheet was comparatively simple as it used data from income statement and cash flow details.

The difference of the current assets and liabilities gave net assets. Current assets included:

y Stocky Debtorsy Pre paid insurancey Cashy Interest receivable

And the current liabilities included:

y Creditorsy Overdrafty Interest payable

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