Question

Loki Labs is experience rapid growth due the increased demand for dog treat products that are low in calories and high in nutrition. Current sales of $125,000, which increased from $90,000 the previous month, are expected to grow at a 25 percent rate. Costs of sales are stable at 75% of sales revenue. Loki's sales are for 30 percent cash with the remaining 70 percent collected the following month. Inventory-on-hand is maintained at a level to support the following month's sales. Inventory is paid in full at the time of receipt. Loki's cash balance at the start of the period was $75,000.

A. For the current month and the following three months, determine Loki's

1. Revenue                                              
2. Inventory                                              
3. Cost of sales                                       
4. Accounts receivable                                         
5. Cash collections                                               
6. Cash disbursements                                         

                                               

                                               

B. Is Loki's gross profit increasing or declining?                       

C. Is Loki's cash flow increasing or declining?              

D. What is Loki's cash balance at the end of the four-month period?

Answer 1

As per rules I am answering the first 4 subparts of the question

	Current Month	Month 2	Month 3	Month 4
Revenue	125000	156250	195312.5	244140.6
Inventory	117187.5	146484.4	183105.5	228881.8
Cost of sales	93750	117187.5	146484.4	183105.5
Accounts receivable	87500	109375	136718.8	170898.4

WORKINGS