Projections

Question 1

Riskiest Months

Answer 1

Are High borrowings and high inventory, check loan relative to receivable to determine reliance on inventory.

Question 2

Projecting AR

Answer 2

Estimate AR days multiply by one days sales.

Question 3

Projecting Inventory

Answer 3

Estimate days COGS. and multiply one day’s average COGS including depreciation expense.

Question 4

Projecting Accounts Payb

Answer 4

Estimate Payable Days and multiply by one day’s COGS.

Question 5

Estimate Interest Expense

Answer 5

Divide CPLT

Question 6

To Project Inventory

Answer 6

Estimated Inventory days x COGS(Purchases)/365

Question 7

Estimate Accrued Expenses

Answer 7

Take a percentage of Operating Exp.

Question 8

Project Tax Liabilities

Answer 8

Deferred Tax Liabilities as a percentage of projected capital Expenditures