Medieval Adventures

1- My looking at the April coin flow statement or balance sheet we see that Medieval Adventures (the Company) needs wasted funds in April to keep from going into a ostracize bank balance by the end of April. If additional financing is non acquired and nothing changes the ending bank balance for April testament be -$2500. In review of projected balance of cash for each month end, it is learned that the most cash the follow will need is $ 40,000 in July. If the business plan is not changed or customers made to net profit within the net 30 terms, a swindle term loan roll in the haynot be repaid with in the current sales and exertion schedule.
2- While the Company is really profitable, the monthly increases in accounts receivable result in $55,000 (500 unit of measurement increase x 2 months x $55 sales price) per month recognition of Income that is not collected for 2 plenteous months later. The physical exertion of cash to produce the following months sales results in a $17,500 (500 unit increase x $35 production cost) use of cash before income is recognized. The company could of used credence so they paid for their production costs in accompanying month.



The company is burning through cash quicker than it can collect it due to it collections and production policies. This could have been avoided if we had better collections insurance policy and only produced inventory when they will be sold. If one precedent or another they had to keep the same policies the Company could of overly had a line of credit with bank to meet short term cash difference between cash use and cash collection.
3- The statement of cash flows for months of March, May and July exactly add up the cash budget in question 1. The reason for this is because we pay our costs when they are incurred.If you want to get a wax essay, order it on our website: Orderessay



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