KEASER MANUFACTURING WORKING CAPITAL MANAGEMENT You have recently been hired by Keaser Manufacturing to work in...

KEASER MANUFACTURING WORKING CAPITAL MANAGEMENT

You have recently been hired by Keaser Manufacturing to work in its established treasury department. Keaser Manufacturing is a small company that produces highly customized cardboard boxes in a variety of sizes for different purchasers. Adam Keaser, the owner of the company, works primarily in the sales and production areas of the company. Currently, the company basically puts all receivables in one pile and all payables in another, and a part-time bookkeeper periodically comes in and attacks the piles. Because of this disorganized system, the finance area needs work, and that’s what you’ve been brought in to do.

The company currently has a cash balance of $210,000, and it plans to purchase new machinery in the third quarter at a cost of $390,000. The purchase of the machinery will be made with cash because of the discount offered for a cash purchase. Adam wants to maintain a minimum cash balance of $135,000 to guard against unforeseen contingencies. All of Keaser’s sales to customers and purchases from suppliers are made with credit, and no discounts are offered or taken.

The company had the following sales each quarter of the year just ended:

	Q1	Q2	Q3	Q4
Gross sales	$1,102,000	$1,141,000	$1,125,000	$1,063,000

After some research and discussions with customers, you’re projecting that sales will be 8 percent higher in each quarter next year. Sales for the first quarter of the following year are also expected to grow at 8 percent. You calculate that Keaser currently has an accounts receivable period of 57 days and an accounts receivable balance of $675,000. However, 10 percent of the accounts receivable balance is from a company that has just entered bankruptcy, and it is likely that this portion will never be collected.

You’ve also calculated that Keaser typically orders supplies each quarter in the amount of 50 percent of the next quarter’s projected gross sales, and suppliers are paid in 53 days on average. Wages, taxes, and other costs run about 25 percent of gross sales. The company has a quarterly interest payment of $185,000 on its long-term debt. Finally, the company uses a local bank for its short-term financial needs. It currently pays 1.2 percent per quarter on all short-term borrowing and maintains a money market account that pays .5 percent per quarter on all short-term deposits.

Adam has asked you to prepare a cash budget and short-term financial plan for the company under the current policies. He has also asked you to prepare additional plans based on changes in several inputs.

Use the numbers given to complete the cash budget and short-term financial plan. Please make the calculations of everything.

Expert Solution

jeff jeffy answered 1 year ago

KEASER MANUFACTURING WORKING CAPITAL MANAGEMENT You have recently been hired by Keaser Manufacturing to work in...

KEASER MANUFACTURING WORKING CAPITAL MANAGEMENT You have recently been hired by Keaser Manufacturing to work in its established treasury department. Keaser Manufacturing is a small company that produces highly customized cardboard boxes in a variety of sizes for different purchasers. Adam Keaser, the owner of the company, works primarily in the sales and production areas of the company. Currently, the company basically puts all receivables in one pile and all payables in another, and a part-time bookkeeper periodically comes in...

Turban Hill Manufacturing Working Capital Management You have recently been hired by Turban Hill Manufacturing to...

Turban Hill Manufacturing Working Capital Management You have recently been hired by Turban Hill Manufacturing to work in the newly established treasury department. Turban Hill Manufacturing is a small company that produces cardboard boxes in a variety of sizes for different purchasers. Gary Turban Hill, the owner of the company, works primarily in the sales and production areas of the company. Currently, the company puts all receivables in one shoe box and all payables in another. Because of the disorganized...

PIEPKORN MANUFACTURING WORKING CAPITAL MANAGEMENT, PART 1 You have recently been hired by Piepkorn Manufacturing to...

PIEPKORN MANUFACTURING WORKING CAPITAL MANAGEMENT, PART 1 You have recently been hired by Piepkorn Manufacturing to work in its newly established treasury department. Piepkorn Manufacturing is a small company that produces cardboard boxes in a variety of sizes. Gary Piepkorn, the owner of the company, works primarily in the sales and production areas. Currently, the company puts all receivables in one shoe box and all payables in another. Because of the disorganized system, the finance area needs work, and that's...

I- KEASER MANUFACTURING WORKING CAPITAL MANAGEMENT (60 ptos) You have recently been hired by Keaser Manufacturing...

I- KEASER MANUFACTURING WORKING CAPITAL MANAGEMENT (60 ptos) You have recently been hired by Keaser Manufacturing to work in its established treasury department. Keaser Manufacturing is a small company that produces highly customized cardboard boxes in a variety of sizes for different purchasers. Adam Keaser, the owner of the company, works primarily in the sales and production areas of the company. Currently, the company basically puts all receivables in one pile and all payables in another, and a part-time bookkeeper...

WORKING CAPITAL MANAGEMENT You have recently been hired to work in your company’s newly established treasury...

WORKING CAPITAL MANAGEMENT You have recently been hired to work in your company’s newly established treasury department. The company is a small company that produces cardboard boxes in a variety of sizes for different purchases. The owner of the company, works primarily in the sales and production areas of the company. Currently, the company puts all receivables in one shoe box and all payables in another. Because of the disorganized system, the finance area needs work – and that’s what...

You have recently been hired by Middleton Manufacturing to work in the newly established treasury department....

You have recently been hired by Middleton Manufacturing to work in the newly established treasury department. Middleton Manufacturing is a small company with disorganized systems and the finance area needs work. The company currently has a beginning cash balance of $100,000 and plans to buy new machinery during the fourth quarter for $500,000, paying cash. The company maintains a minimum cash balance of $100,000 and invests any excess cash in a money market account. The company borrows short-term from CIBC,...

You have recently been hired by Piepkorn Manufacturing to work in a newly established treasury department....

You have recently been hired by Piepkorn Manufacturing to work in a newly established treasury department. Piepkorn Manufacturing is a small company that produces cardboard boxes in a variety of sizes for different purchasers. Gary Piepkon, the owner of the company, works primarily in the sales and production areas of the company. Currently, the company puts all receivables in one shoe box and all payables in another. Because of the disorganized system, all finance area needs work, and that’s what...

You have been hired as a change management consultant for a manufacturing company. The leadership of...

You have been hired as a change management consultant for a manufacturing company. The leadership of the company currently uses a top-down management approach. The organizational structure is a hierarchy (pyramid type). Employees are not encouraged to be creative or make suggestions or decisions. They are also not encouraged to experiment and come up with new solutions to problems.The company has grown rapidly over the past decade, from generating $1 million in sales to $100 million. In the past year,...

You are working as a consultant and have been hired by a company to assist in...

You are working as a consultant and have been hired by a company to assist in creating a company Code of Ethics in order to attract and retain more customers to your products and to prove the company’s ethical conduct & practices. This smaller, private company sells footwear for the Canadian and American marketplaces. The company has made the decision to do business with a supplier in Brazil. The initial product quality has been very good, and the delivery of...

You have recently been hired by a company that wants to “go global” and you have...

You have recently been hired by a company that wants to “go global” and you have been selected to help research this possibility. The CEO has selected you to research your chosen country and report back. You must prepare a report on your country’s four cultural values and provide examples of how they relate to business transactions. For your chosen country of France write a three-page paper on the following: Individual and collective dimension of the country Equality and hierarchy...

Question

KEASER MANUFACTURING WORKING CAPITAL MANAGEMENT You have recently been hired by Keaser Manufacturing to work in...

Solutions

Expert Solution

Related Solutions

KEASER MANUFACTURING WORKING CAPITAL MANAGEMENT You have recently been hired by Keaser Manufacturing to work in...

Turban Hill Manufacturing Working Capital Management You have recently been hired by Turban Hill Manufacturing to...

PIEPKORN MANUFACTURING WORKING CAPITAL MANAGEMENT, PART 1 You have recently been hired by Piepkorn Manufacturing to...

I- KEASER MANUFACTURING WORKING CAPITAL MANAGEMENT (60 ptos) You have recently been hired by Keaser Manufacturing...

WORKING CAPITAL MANAGEMENT You have recently been hired to work in your company’s newly established treasury...

You have recently been hired by Middleton Manufacturing to work in the newly established treasury department....

You have recently been hired by Piepkorn Manufacturing to work in a newly established treasury department....

You have been hired as a change management consultant for a manufacturing company. The leadership of...

You are working as a consultant and have been hired by a company to assist in...

You have recently been hired by a company that wants to “go global” and you have...