b6022 module 3 assignment 2 lasa 1 genesis energy cash position analysis new,argosy b6022,b6022,argosy b6022 module 3 tutorial,b6022 module 3 assignment,argosy b6022 module 3 help

1. ARGOSY B6022 Module 3 Assignment 2 LASA 1
Genesis Energy Cash Position Analysis NEW
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B6022 Module 3 Assignment 2 LASA 1 Genesis Energy
Cash Position Analysis NEW
The Genesis Energy operations management team is
now preparing to implement the operating expansion
plan. Previously, the firm's cash position did not pose a
challenge. However, the planned foreign expansion
requires Genesis Energy to have a reliable source of
funds for both short-term and long-term needs.

2. One of Genesis Energy's potential lenders tells the
team that in order to be considered as a viable
customer, Genesis Energy must prepare and submit a
monthly cash budget for the current year and a
quarterly budget for the subsequent year. The lender
will review the cash budget and determine whether or
not Genesis Energy can meet the loan repayment
terms. Genesis Energy's ability to repay the loan
depends not only on sales and expenses but also on
how quickly the company can collect payment from
customers and how well it manages its supplier terms
and other operating expenses. The Genesis Energy
team members agreed that being fully prepared with
factual data would allow them to maximize their
position as well as negotiate favorable financing terms.
The Genesis Energy management team held a
brainstorming session to chart a plan of action, which
is detailed here.
Evaluate historical data and prepare assumptions that
will drive the planning process.

3. Produce a detailed cash budget that summarizes
cash inflow, outflow, and financing needs.
Identify and compare interest rates, both short-term
and long-term, using debt and equity.
Analyze the financing mix (short/long) and the cost
associated with the recommendation.
Since this expansion is critical to Genesis Energy
expanding into new overseas markets, the operations
management team has been asked to prepare an
executive summary with supporting details for
Genesis Energy's senior executives.
Working over a weekend, the management team
developed realistic assumptions to construct a
working capital budget.

4. Sales: The marketing expert and the newly created
customer service personnel developed sales
projections based on historical data and forecast
research
Other cash receipt: Rental income $15,000 per month
Production material: The production manager
forecasted material cost based on cost quotes from
reliable vendors, the average of which is 50 percent of
sales
Other production cost: Based on historical cost data,
this cost on an average is 30 percent of the material
cost and occurs in the month after material purchase
Selling and marketing expense: Five percent of sales

5. General and administrative expense: Twenty percent
of sales
Interest payments: $75,000—Payable in December
Tax payments: $15,000—Quarterly due on 15th of
April, July, October, and January
Minimum cash balance desired: $25,000 per month
Cash balance start of month (December): $15,000
Available short-term annual interest rate is 8 percent,
long-term debt rate is 9 percent, and long-term equity
is 10 percent. All funds would be available the first
month when the firm encounters a deficit
Dividend payment: None

6. Based on this information, do the following:
Using the Cash Budget spreadsheet, calculate detailed
company cash budgets for the forthcoming and
subsequent years. Summarize the sources and uses of
cash, and identify the external financing needs for both
the forthcoming and subsequent years.
Download this Excel spreadsheet to view the
company's cash budget. You will calculate the
company's monthly cash budget for the forthcoming
year and quarterly budget for the subsequent year
using this information.
In an executive-level report, summarize the company’s
financing needs for the forecast period and provide
your recommendations for financing the planned
activities. Be sure to comment on the following:
Your recommended financing solution and cost to the
firm: If Genesis Energy needs operating cash, how

7. should it fund this need? Are there internal policy
changes with regard to collections or payables
management you would recommend? What types of
external financing are available?
Your concerns associated with the firm's cash
budget. Is this a sign of weak sales performance or
poor cost control? Why or why not?
Write a 7-page paper in Word format. Apply APA
standards to citation of sources. Use the following file
naming convention: LastnameFirstInitial_M3_A2.doc.