COMM 203 - F18 - C19 - S-T Fin Plan.pptx

Q4 cash disbursements 5123936 2044214 51580 q4 cash

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Q4 Cash Disbursements 51,239.36 20,442.14 515.80 Q4 Cash Disbursements $72,197.29
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The Cash Budget Short-Term Financial Plan Saskatchewan Kitesurfing School (SKKS) Payment of Accounts: 57.35% of Sales Expenditures (Incl. Taxes): 22.88% of Sales Quarterly Financial Expenses: $515.80 Capital Expenditures in Q1: $123,550 Cash Collection Schedule Beginning Receivables in Q1: $75,235 Sales Q1: $74,550 Q2: $65,215 Q3: $51,730 Q4: $89,345 Surfing in the Prairies is really unique! External Financing Strategy via Bank Loan Cash Disburse in Q1: $21,750 Short-Term Borrowing in Q3: $60,000 Interest Rate: 7.25% Minimum Cash Balance: $1,000 The CEO of SKKS believes that a bank loan could make things better. Yet, she will only be able to get the loan at the end of Q3 . As a result, she intends to build the short-term financial plan for the year . In Q1, we have In Q2, we have Oops… Q4 Net Cash Inflow 70,537.50 72,197.29 Q4 Net Cash Inflow $1,659.79   Q1 Ending Cash Balance 21,750 71,367.27 Q1 Ending Cash Balance $49,617.27   Q1 Cumulative Surplus $50,617.27   Q2 Beginning Cash Balance $49,617.27   Q2 Ending Cash Balance 49,617.27 17,044.71   Q2 Ending Cash Balance $32,572.56   Q2 Cumulative Surplus $33,572.56  
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The Cash Budget Short-Term Financial Plan Saskatchewan Kitesurfing School (SKKS) Payment of Accounts: 57.35% of Sales Expenditures (Incl. Taxes): 22.88% of Sales Quarterly Financial Expenses: $515.80 Capital Expenditures in Q1: $123,550 Cash Collection Schedule Beginning Receivables in Q1: $75,235 Sales Q1: $74,550 Q2: $65,215 Q3: $51,730 Q4: $89,345 Surfing in the Prairies is really unique! External Financing Strategy via Bank Loan Cash Disburse in Q1: $21,750 Short-Term Borrowing in Q3: $60,000 Interest Rate: 7.25% Minimum Cash Balance: $1,000 In Q4, we have In Q3, we report the new short-term borrowing of $60,000. We have The ending cash balance and the cumulative surplus are $1,000 and $0 Kitesurfing is very bump y! Q3 Beginning Cash Balance $32,572.56   Q3 Ending Cash Balance 32,572.56 16,453.72 60,000   Q3 Cumulative Surplus $42,881.16 Q4 Interest (Short-Term Borrowing ) 60,000 0.0725 $4,350 Q3 Ending Cash Balance $43,881.16 Q4 Beginning Cash Balance $43,881.16 Q4 Short-Term Borrowing Repaid 43,881.16 1,659.79 4,350 1,000 $36,871.37 Q4 Ending Short-Term Debt 60,000 36,871.37 $23,128.63
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CLASS 19 RECENT DEVELOPMENTS Source : McKinsey and Company (2015). Global Payments 2015: A Healthy Industry Confronts Disruption , Financial Services Practice, McKinsey and Company, New York, NY, 32 p.
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CLASS 19 RECENT DEVELOPMENTS Source : Shah, A., Roongta, P., Jain, C., Kaushik, V., and Awadhiya, A. (2016). Digital Payments 2020: The Making of a $500 Billion Ecosystem in India , Boston Consulting Group/Google India, Mumbai, India, 52 p.
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CLASS 19 CONCEPT BACKGROUND Source : Custódio, C., Ferreira, M. A., and Laureano, L. (2013). Why are US firms using more short-term debt?”, Journal of Financial Economics 108(1): 182–212.
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CLASS 19 IMPLICATIONS According to the literature in corporate finance , opaque firms are responsible for the decrease in corporate use of longer-term debt Financiers could become lost because potential borrowing amounts necessary to keep the business going could be unpredictable
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