Mini Case: Gale Force Corporation – Part A
Table 1
SALES FORECAST, CASH RECEIPTS & PAYMENTS, CASH BUDGET (FIRST YEAR)

Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep

Sales Forecast
Sales (units)
150
75
25
0
0
300
500
1,000
1,000
1,000
500
250
Sales ($)
$450,000
$225,000
$75,000
$0
$0
$900,000
$1,500,000
$3,000,000
$3,000,000
$3,000,000
$1,500,000
$750,000
$3,000
Cash Receipts Schedule
50% cash
$225,000
$112,500
$37,500
$0
$0
$450,000
$750,000
$1,500,000
$1,500,000
$1,500,000
$750,000
$375,000
50% prior month
375,000
225,000
112,500
37,500
0
0
450,000
750,000
1,500,000
1,500,000
1,500,000
750,000
Total cash receipts
$600,000
$337,500
$150,000
$37,500
$0
$450,000
$1,200,000
$2,250,000
$3,000,000
$3,000,000
$2,250,000
$1,125,000
50%
Cash Payments Schedule
Production (units)
150
75
25
0
0
300
500
1,000
1,000
1,000
500
250
Production ($2,000/ea.)
$300,000
$150,000
$50,000
$0
$0
$600,000
$1,000,000
$2,000,000
$2,000,000
$2,000,000
$1,000,000
$500,000
Overhead
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
Dividends & Interest

1,000,000

Taxes
150,000
0
0
150,000

150,000

300,000

Total cash payments
$650,000
$350,000
$250,000
$350,000
$200,000
$800,000
$1,350,000
$2,200,000
$2,200,000
$2,500,000
$2,200,000
$700,000
2,000
Cash Budget (minimum bal. $125,000)
Cash flow
($50,000)
($12,500)
($100,000)
($312,500)
($200,000)
($350,000)
($150,000)
$50,000
$800,000
$500,000
$50,000
$425,000
Begin cash
125,000
125,000
125,000
125,000
125,000
125,000
125,000
125,000
125,000
125,000
300,000
350,000
Cum. Cash balance
75,000
112,500
25,000
(187,500)
(75,000)
(225,000)
(25,000)
175,000
925,000
625,000
350,000
775,000
Monthly loan (repayment)
50,000
12,500
100,000
312,500
200,000
350,000
150,000
(50,000)
(800,000)
(325,000)
0
0
Cum. Loan
50,000
62,500
162,500
475,000
675,000
1,025,000
1,175,000
1,125,000
325,000
0
0
0
End cash balance
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$300,000
$350,000
$775,000

Table 2
SALES (UNITS) (FIRST YEAR)
First Qtr.
Second Qtr.
Third Qtr.
Fourth Qtr.
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
150
75
25
0
0
300
500
1,000
1,000
1,000
500
250

Table 3
PRODUCTION & INVENTORY (FIRST YEAR)

Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Beg Inv.
400
400
400
400
400
400
400
400
400
400
400
400
Production
150
75
25
0
0
300
500
1,000
1,000
1,000
500
250
Sales
150
75
25
0
0
300
500
1,000
1,000
1,000
500
250
End Inv.
400
400
400
400
400
400
400
400
400
400
400
400
Inv. ($2,000/unit)
$800,000
$800,000
$800,000
$800,000
$800,000
$800,000
$800,000
$800,000
$800,000
$800,000
$800,000
$800,000

Table 4
TOTAL CURRENT ASSETS (FIRST YEAR) Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
End cash balance
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$300,000
$350,000
$775,000
A/R
225,000
112,500
37,500
0
0
450,000
750,000
1,500,000
1,500,000
1,500,000
750,000
375,000
Inventory
800,000
800,000
800,000
800,000
800,000
800,000
800,000
800,000
800,000
800,000
800,000
800,000
Total Current Assets
$1,150,000
$1,037,500
$962,500
$925,000
$925,000
$1,375,000
$1,675,000
$2,425,000