Cash budget-Scenario analysis Trotter Enterprises, Inc., has gathered the follow

Question

Cash budget-Scenario analysis Trotter Enterprises, Inc., has gathered the following data in order to plan for its cash requirements and short-term investment opportunities for October, November and December. All amounts are shown in thousands of dollars. (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) October (S000) December (S000) Most likely November (5000) Pessi mistic Most likely Opti misti Most likely Opti mistic Pessi Pessi ti mistic mistic mistic $261 284 $342 327 $461 419 S199 202 $285 262 $368 314 S192 286 $294 lotal cash receipts Total cash disbursements $351 317 a. Prepare a scenario analysis of Trotter's cash budget using $20,000 as the beginning cash balance for October and a minimum required cash balance of $19,000 b. Use the analysis prepared in part a to predict Trotter's financing needs and investment opportunities over the months of October, November, and December. Discuss how knowledge of the timing and amounts involved can aid the planning process. a. Prepare a scenario analysis of Trotter's cash budget using $20,000 as the beginning cash balance for October and a minimum required cash balance of $19,000 Complete the cash budget for the pessimistic scenario below (Round to the nearest dollar.) Trotter Enterprises, Inc. Multiple Cash Budgets ($000) October November December Pessi mistic Pessi- Pessi mistic mistic 261 S 199 S 192 Total cash receipts Total cash disbursements Net cash flow Add: Beginning cash Ending cash Financing Cash balance 284 202 286

Explanation / Answer

October November December Total cash receipts             261             199             192 Total cash disbursements             284             202             286 Net cash flow              -23                -3              -94 Add Beginning cash                20                19                19 Ending cash                -3                16              -75 Financing                22                  3                94 Cash balance                19                19                19

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