ANSWER PYQ FIN242 - CH3 PRO FORMA & CASH BUDGET PDF

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FINCHAPTER 3 – FINANCIAL FORECASTING AND PLANNINGTUTORIALJan 2018 : Section B. Question 2 (PRO-FORMA BALANCE SHEET)Changes for cash = expected percent of increase sales x initial cashChanges for cash = 20/100 x RM53,Changes for cash = RM10,Forecasted cash = changes for cash + initial cashForecasted ...

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FIN242 CHAPTER 3 – FINANCIAL FORECASTING AND PLANNING TUTORIAL

Sales – RM500,000 Dividend – 2.5% / 0.025

Jan 2018 : Section B. Question 2 (PRO-FORMA BALANCE SHEET)

NPM – 5% / 0.05

Changes for cash = expected percent of increase sales x initial cash Changes for cash = 20/100 x RM53,000 Changes for cash = RM10,600

forecast percent of increase – 20% / 0.2

Forecasted cash = changes for cash + initial cash Forecasted cash = RM10,600 + RM53,000 Forecasted cash = RM63,600 Forecasted sales = expected percent of increase sales x initial sales Forecasted sales = 20/1000 x RM500,000 Forecasted sales = RM100,000 + RM500,000 Forecasted sales = RM600,000 (in 2018) Forecasted Retained Earnings (RE) = initial RE + forecasted sales (NPM)(1 – dividend payout ratio) Forecasted Retained Earnings (RE) = RM37,000 + RM600,000 (0.05)(1 – 0.025) Forecasted Retained Earnings (RE) = RM66,250 Additional Funds Needed (AFN) = investment – internal funds Additional Funds Needed (AFN) = RM69,200 – RM44850 Additional Funds Needed (AFN) = RM24,350 MJA PTD LTD PRO FORMA BALANCE SHEET AS AT 31 DECEMBER 2018 (RM)

Cash Prepaid expenses Account Receivable Inventories Net plant and equipment Land TOTAL ASSETS Account payable

Initial Forecasted Changes RM RM RM 53,000 63,600 10600 36,000 43,200 7200 55,000 66,000 11000 82,000 98,400 16400 80,000 96,000 16000 40,000 346,000

48,000 415,200

8000 69,200

58,000

69,600

11600

0.2 0.2 0.2 0.2 0.2 0.2

0.2 Notes payable Taxes payable Bond Preferred stock Common stock Retained earnings AFN TOTAL CLAIMS

35,000 20,000 21,000 45,000 130,000 37,000 346,000

35,000 24,000 21,000 45,000 130,000 66,250 24,350 415,200

0 4000 0 0 0 29,250

0.2

Sales – RM800,000

March 2017 : Section B. Question 2 (PRO-FORMA BALANCE SHEET)

Dividend – 50% / 0.5 NPM – 10% / 0.1

Changes for cash = expected percent of increase sales x initial cash Changes for cash = 20/100 x RM110,000 Changes for cash = RM22,000

forecast percent of increase – 20% / 0.2

Forecasted cash = changes for cash + initial cash Forecasted cash = RM22,000 + RM110,000 Forecasted cash = RM132,000 Forecasted sales = expected percent of increase sales x initial sales Forecasted sales = 20/100 x RM800,000 Forecasted sales = RM160,000 + RM500,000 Forecasted sales = RM960,000 (in 2017) Forecasted Retained Earnings (RE) = initial RE + forecasted sales (NPM)(1 – dividend payout ratio) Forecasted Retained Earnings (RE) = RM73,000 + RM960,000 (0.1)(1 – 0.5) Forecasted Retained Earnings (RE) = RM121,000 Additional Funds Needed (AFN) = investment – internal funds Additional Funds Needed (AFN) = RM182,600 – RM86,900 Additional Funds Needed (AFN) = RM95,700 EMAGO BERHAD PRO FORMA BALANCE SHEET AS AT 31 DECEMBER 2017 (RM)

Cash Prepaid expenses Account Receivable Inventories Net fixed assets TOTAL ASSETS

Initial Forecasted Changes RM RM RM 110,000 132,000 22000 18,000 21,600 3600 105,000 126,000 21000 130,000 156,000 26000 550,000 660,000 110000 913,000 1,095,600 182,600

Account payable/

190,000

228,000

0.2 0.2 0.2 0.2 0.2

38000 0.2

Notes payable Accrued interest/ Long-term debt Bonds Equities Retained earnings/ AFN TOTAL CLAIMS

25,500 4,500 110,000 220,000 290,000 73,000 913,000

25,500 5,400 110,000 220,000 290,000 121,000 95,700 1,095,600

0 900 0 0 0 48,000

0.2

December 2018 : Section B. Question 1 (PRO-FORMA BALANCE SHEET) Changes for cash = expected percent of increase sales x initial cash Changes for cash = 25/100 x RM103,000 Changes for cash = RM25,750

Sales – RM2,000,000

Forecasted cash = changes for cash + initial cash Forecasted cash = RM25,750 + RM103,000 Forecasted cash = RM128,750

forecast of increase – RM2,500,000

Dividend – 70% / 07 NPM – 4% / 0.04

Forecasted sales = expected percent of increase sales x initial sales RM2,500,000 = expected percent of increase sales x RM2,000,000 RM2,500,000 / RM2,000,000 = expected percent of increase sales 1.25 x 100 = expected percent of increase sales 125% - 100% = expected percent of increase sales 25% = expected percent of increase sales Forecasted Retained Earnings (RE) = initial RE + forecasted sales (NPM)(1 – dividend payout ratio) Forecasted Retained Earnings (RE) = RM82,000 + RM2,500,000 (0.04)(1 – 0.7) Forecasted Retained Earnings (RE) = RM112,000 Additional Funds Needed (AFN) = investment – internal funds Additional Funds Needed (AFN) = RM75,000 – RM44,000 Additional Funds Needed (AFN) = RM31,000 SUASANA GEMILANG SDN BHD PRO FORMA BALANCE SHEET AS AT 31 DECEMBER 2019 (RM)

Cash Marketable Securities Account Receivable Inventories Net fixed assets TOTAL ASSETS Account payable/ Accrued expenses/ Notes payable Long-term debt Common shares Retained earnings/ AFN TOTAL CLAIMS

Initial Forecasted Changes RM RM RM 103,000 128,750 25750 40,000 50,000 10000 15,000 18,750 3750 52,000 65,000 13000 90,000 112,500 22500 300,000 375,000 75,000 32,000 24,000 45,000 63,000 54,000 82,000 300,000

40,000 30,000 45,000 63,000 54,000 112,000 31,000 375,000

8000 6000 0 0 0 30,000

0.25 0.25 0.25 0.25 0.25

0.25 0.25

March 2016 : Section A. Question 2(a) (PRO-FORMA BALANCE SHEET) Changes for cash = expected percent of increase sales x initial cash Changes for cash = 60/100 x RM100,000 Changes for cash = RM60,000 Forecasted cash = changes for cash + initial cash Forecasted cash = RM60,000 + RM100,000 Forecasted cash = RM160,000

Sales – RM4,520,000 Dividend paid – RM180,800 Net earnings – RM226,000 forecast percent of increase – 60% / 0.6

Forecasted sales = expected percent of increase sales x initial sales Forecasted sales = 60/100 x RM4,520,000 Forecasted sales = RM2,712,000 + RM4,520,000 Forecasted sales = RM7,232,000 (in 2016) Percent of NPM = net earnings / revenue x 100% Percent of NPM = RM226,000 / RM4,520,000 x 100% Percent of NPM = 5% Percent of Dividend Payout Ratio (DIR) = total dividend / net earnings x 100% Percent of Dividend Payout Ratio (DIR) = RM180,800 / RM226,000 x 100% Percent of Dividend Payout Ratio (DIR) = 80% Forecasted Retained Earnings (RE) = initial RE + forecasted sales (NPM)(1 – dividend payout ratio) Forecasted Retained Earnings (RE) = RM380,000 + RM7,232,000 (0.05)(1 – 0.8) Forecasted Retained Earnings (RE) = RM452,320 Additional Funds Needed (AFN) = investment – internal funds Additional Funds Needed (AFN) = RM1,932,000 – RM170,720 Additional Funds Needed (AFN) = RM1,761,280

BLACK GOLD HOLDINGS PRO FORMA BALANCE SHEET AS AT 31 DECEMBER 2016 ('000)

Cash Prepaid expenses Account Receivable Marketable securities Inventory Plant and equipment TOTAL ASSETS Accruals/ Trade creditors Tax accruals Accrued wages/ Notes payable Bond Common shares Retained earnings/ AFN TOTAL CLAIMS

Initial Forecasted Changes RM RM RM 100 160 60 180 288 108 320 512 192 340 544 204 680 1,088 408 1,600 2,560 960 3,220 5,152 1,932 36 54 161 128 732 819 910 380 3,220

58 54 161 205 732 819 910 452 1,761 5,152

21.6 0 0 76.8 0 0 0 72,320

0.6 0.6 0.6 0.6 0.6 0.6

0.6

0.6

September 2015 : Section B. Question 3(b) (PRO-FORMA BALANCE SHEET) Changes for cash = expected percent of increase sales x initial cash Changes for cash = 50/100 x RM2,780 Changes for cash = RM1,390

Sales – RM10,000 Dividend paid – RM2,820 Net income – RM6,000

Forecasted cash = changes for cash + initial cash Forecasted cash = RM1,390 + RM2,780 Forecasted cash = RM4,170

forecast percent of increase – 50% / 0.5

Forecasted sales = expected percent of increase sales x initial sales Forecasted sales = 50/100 x RM10,000 Forecasted sales = RM5,000 + RM10,000 Forecasted sales = RM15,000 (in 2016) Percent of NPM = net earnings / sales x 100% Percent of NPM = RM6,000 / RM10,000 x 100% Percent of NPM = 60% Percent of Dividend Payout Ratio (DIR) = total dividend / net earnings x 100% Percent of Dividend Payout Ratio (DIR) = RM2,820 / RM6,000 x 100% Percent of Dividend Payout Ratio (DIR) = 47% Forecasted Retained Earnings (RE) = initial RE + forecasted sales (NPM)(1 – dividend payout ratio) Forecasted Retained Earnings (RE) = RM5,500 + RM15,000 (0.6)(1 – 0.47) Forecasted Retained Earnings (RE) = RM10,270 Additional Funds Needed (AFN) = investment – internal funds Additional Funds Needed (AFN) = RM13,440 – RM8,305 Additional Funds Needed (AFN) = RM1,761,280

SYAHIRU PTD. LTD PRO FORMA BALANCE SHEET AS AT 30 JUNE 2016 (RM)

Cash Account Receivable Inventories Marketable securities Fixed assets TOTAL ASSETS Notes payable Trade Creditors Account payable/ Accruals/ Long-term debt Common shares Retained earnings/ AFN TOTAL CLAIMS

Initial Forecasted Changes RM RM RM 2,780 4,170 1390 3,600 5,400 1800 5,700 8,550 2850 2,800 4,200 1400 12,000 18,000 6000 26,880 40,320 13,440 5,780 1,000 3,850 3,220 3,200 4,330 5,500 26,880

5,780 1,000 5,775 4,830 3,200 4,330 10,270 5,135 40,320

0 0 1925 1610 0 0 4,770

0.5 0.5 0.5 0.5 0.5

0.5 0.5

March 2015 : Section B. Question 3(d) (PRO-FORMA BALANCE SHEET) Changes for cash = expected percent of increase sales x initial cash Changes for cash = 20/100 x RM200,000 Changes for cash = RM40,000

Sales – RM12,000,000

Forecasted cash = changes for cash + initial cash Forecasted cash = RM40,000 + RM200,000 Forecasted cash = RM240,000

forecast of increase – RM14,400,000

Dividend paid – RM360,000 NPM – 5% / 0.05

Forecasted sales = expected percent of increase sales x initial sales RM14,400,000 = expected percent of increase sales x RM12,000,000 RM14,400,000 / RM12,000,000 = expected percent of increase sales 1.2 x 100 = expected percent of increase sales 120% - 100% = expected percent of increase sales 20% = expected percent of increase sales Percent of NPM = net earnings / sales x 100% 5% = net earnings / RM12,000,000 5% x RM12,000,000 = net earnings RM600,000 = net earnings Percent of Dividend Payout Ratio (DIR) = total dividend / net earnings x 100% Percent of Dividend Payout Ratio (DIR) = RM360,000 / RM600,000 x 100% Percent of Dividend Payout Ratio (DIR) = 60% Forecasted Retained Earnings (RE) = initial RE + forecasted sales (NPM)(1 – dividend payout ratio) Forecasted Retained Earnings (RE) = RM400,000 + RM14,400,000 (0.05)(1 – 0.6) Forecasted Retained Earnings (RE) = RM688,000 Additional Funds Needed (AFN) = investment – internal funds Additional Funds Needed (AFN) = RM600,000 – RM368,000 Additional Funds Needed (AFN) = RM232,000

EFI BERHAD PRO FORMA BALANCE SHEET AS AT 31 DECEMBER 2014 ('000)

Cash Account Receivable Inventory Prepaid Net fixed assets TOTAL ASSETS Accounts payable/ Accruals/ Notes payable Long-term debt Common stock Retained earnings/ AFN TOTAL CLAIMS

Initial Forecasted Changes RM RM RM 200 240 40 800 960 160 600 720 120 200 240 40 1,200 1,440 240 3,000 3,600 600 300 100 400 1,000 800 400 3,000

360 120 400 1,000 800 688 232 3,600

60 20 0 0 0 288

0.2 0.2 0.2 0.2 0.2

0.2 0.2

June 2019 : Section B. Question 2(a) (CASH BUDGET) Cash sales – 20% of current total sale Credit sales – 40% collected in following month & 60% after two months Purchase raw material – one month advance 60% percent & pay within two months after buy (credit payment) = 100% / 2 month = 1 month equal to 50% Tax – RM20,000 pay in July & Purchase new asset – RM150,000 pay in August Opening cash balance – RM100,000 in July & hold every month RM850,000 & Interest – 10% MCMC COMPANY CASH BUDGET FOR THIRD QUARTER OF 2019 RM APRIL 1)

MAY

JUNE

JULY

AUG

SEPT

Receipts Sales

Cash sale (20%) Credit sale

4,000,000

5,000,000

7,000,000

6,000,000

5,000,000

7,000,000

800000

1000000

1400000

1200000

1000000

1400000

3,200,000

4,000,000

5,600,000

4,800,000

4,000,000

5,600,000

1280000

1600000

2240000

1920000

1600000

1920000

2400000

3360000

2880000

1 month after (40%) 2 month after (60%) Dividend TOTAL CASH RECEIPTS

800000

2,280,000

4920000

5,840,000

6280000

5,880,000

3000000

4200000

3600000

3000000

4200000

3000000

1 month (50%)

1500000

2100000

1800000

1500000

2100000

2 month (50%)

0

1500000

2100000

1800000

1500000

Disbursement 2)

Purchase of raw material (60%)

Credit payment:

Tax

20,000

Purchase of new asset

150,000

TOTAL CASH DISBURSEMENT

Net Cash Flow

800,000

1500000

3600000

3920000

3450000

3600000

780,000

1,320,000

1,920,000

2,830,000

2,280,000

Cash Reconciliation (-) Interest borrowing (+) Beginning cash balance 3)

Ending cash balance (-) minimum cash balance

4)

EXCESS/DEFICIT

0

0

0

100,000

2,020,000

4,850,000

2,020,000

4,850,000

7,130,000

850,000

850,000

850,000

1,170,000

4,000,000

6,280,000

October 2016 : Section A. Question 1 (CASH BUDGET) Cash sales – 20% of current total sale Credit sales – 80% collected in following month, 15% after two months & 4% third month Purchase raw material – 65% pay after one month after buy (credit payment) & Machine RM400,000 in September Tax – RM5000,000 pay in August, Dividend – RM50,000 received in October, Rental – RM100,000 monthly, Cash expenditure – 3% of current month sales, Labor expenses – 1% of sales next month Opening cash balance – RM300,000 in August, Minimum cash balance – RM300,000, Interest – RM310,000 in September UQASHA CORPORATION CASH BUDGET FOR AUGUST TO OCTOBER 2016 RM MAY JUNE JULY AUG 1)

Receipts Sales Cash sale (20%) Credit sale 1 month after (80%) 2 month after (15%) 3 month after (4%) Dividend TOTAL CASH RECEIPTS

2)

Disbursement Purchase of material (65%) Credit payment: 1 month (100%) Tax Purchase of new machine Rental Other cash expenditure (3%) Labour expense (1%) Interest payment TOTAL CASH DISBURSEMENT

3)

Net Cash Flow

4)

Cash Reconciliation (-) Interest borrowing (+) Beginning cash balance Ending cash balance (-) minimum cash balance EXCESS/DEFICIT

SEPT

OCT

2,000,000

3,000,000

5,000,000

5,000,000

6,000,000

3,000,000

400000 1,600,000

600000 2,400,000 1280000

1000000 4,000,000 1920000 240000

1000000 4,000,000 3200000 360000 64000

1200000 4,800,000 3200000 600000 96000

400000

1,880,000

3160000

4,624,000

5096000

600000 2,400,000 3840000 600000 160000 50,000 5,250,000

1950000

3250000

3250000

3900000

1950000

1300000

1950000

3250000

3250000 500,000

3900000

1950000

100,000 60000 30000

100,000 90000 50000

100,000 150000 50000

100,000 150000 60000

190,000

2190000

3550000

210,000

-310,000

0

0

4060000

400,000 100,000 180000 30000 310,000 4920000

2160000

-390,000

564,000

176,000

3,090,000

0

300,000 864,000 300,000 564,000

864,000 1,040,000 300,000 740,000

1,040,000 4,130,000 300,000 3,830,000

100,000 90000 20000

Jan 2018 : Section B. Question 2 (CASH BUDGET) Cash sales – 40% of current total sale Credit sales – 30% collected in following month & 30% after two months Purchase raw material – one month advance 60% & pay 100% after two months Operating expenses – RM15,000 monthly, Rental – RM5,000 monthly, Utilities – 2% of current month sales Ending cash balance – RM20,000 in December, Minimum cash balance – RM100,000, Interest – RM10,000 in March FARIMIDA CORPORATION CASH BUDGET FOR FIRST QUARTER OF 2018 RM OCT 1)

Receipts Sales Cash sale (40%) Credit sale 1 month after (30%) 2 month after (30%) Other cash receipts TOTAL CASH RECEIPTS

NOV

DEC

JAN

FEB

MARCH

600,000

650,000

450,000

350,000

310,000

250,000

240000 360,000

260000 390,000 108000

180000 270,000 117000

140000 210,000 81000

124000 186,000 63000

100000 150,000 55800

108000

117000

81000

63000

240000

368,000

405000

338,000

268000

218,800

390000

270000

210000

186000

150000

516000

390000

270000

210000

186000

150000

Disbursement 2)

Purchase of raw material (60%) Credit payment: 1 month (100%) Operating expenses

15,000

15,000

15,000

15,000

15,000

15,000

Rental Utilities (2%)

5,000 12,000

5,000 13,000

5,000 9,000

5,000 7,000

5,000 6,200

5,000 5,000

12,000

423000

299000

237000

212200

185000

228,000

-55,000

106,000

101,000

55,800

33,800

Interest payment TOTAL CASH DISBURSEMENT Net Cash Flow

3)

10,000

Cash Reconciliation (-) Interest borrowing (+) Beginning cash balance

4)

20,000

121,000

176,800

Ending cash balance

121,000

176,800

210,600

(-) minimum cash balance

100,000

100,000

100,000

21,000

76,800

110,600

EXCESS/DEFICIT

0

0

0

June 2018 : Section B. Question 2(a) (CASH BUDGET) Cash sales – 20% of current total sale Credit sales – 40% collected in following month & 60% after two months Cash inflow – May (RM12,000), July (RM15,000), September (RM27,000) Purchase– 10% one month, 50% following month, 40% after two months purchased Salaries – RM50,000 monthly, Rental expenses – RM20,000 monthly, Dividend – ...