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ACC 500 Case Study – Comprehensive Cash Budget

ACC 500 Case Study – Comprehensive Cash Budget

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Manchester Auditoriums Inc. provides the venue for many performers and talent companies touring the Southern New Hampshire region. Kathleen Johnson, treasurer of Manchester Auditoriums, needs to prepare a loan request to the Granite Cooperative Bank to meet the cash needs for the upcoming year which begins on January 1, 2015. Manchester Auditoriums has become a premier venue in the area and has grown considerably in the last few years. Below are the latest balance sheet and income statement for the year that just ended on December 31, 2014.
Required:
1. Prepare a cash budget by quarter for 2015 using the provided template. Will Manchester keep their projected borrowing needs in line with the $1 million line of credit they are asking the bank for?
2. As we see in the budgeted assumptions, Manchester wants to improve its cash flow by concentrating on collecting receivables sooner in the second half of 2015. What else can Manchester do to improve its cash flow?
3. Prepare a projected income statement and balance sheet for 2015.
4. Manchester's goal is to have return on sales of 8% in 2015. Based on the projected income statement calculated for 2015 will Manchester achieve this goal? What are some things Manchester can do to improve its return on sales?
5. Based on the cash budget and projected financial statements, do you recommend that the company keep growing and spend money on capital expenditures? Why? 

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