You are required to prepare a cash flow budget. Read the instructions below and discuss with your group and using the template provided complete the cash flow budget

  • Case Study
As a manager of an event management company, you are required to complete a cash Flow forecast using the template provided. Your cash flow forecast will predict the bank balance at the end of each month for every month of the year. The information you have at your disposal to complete this task is as follows:

§  The event management company has on its books four (4) major events to run which will take place in March, May, August, and October.

§  The total of $285,000 of ticket sales will be earned in the months that the events are held. The March event will earn $65,000, and the other events in May, August and October will earn $70,000, 85,000 and $65,000 respectively.

§  Expenditure on casual salaries, travel and transport, and venue hire will occur only in the months in which the four events take place. These expenditures will be the same for each event.

§  Salaries and Office and administration expenses will occur evenly every month.

§  The company’s opening bank balance on 1 January is $5,000

§  The company will receive a government grant of $50,000 in July.

§  The company will make a small income from Merchandising during the months in which the four events are staged. The event in March will earn $1,300 merchandising income, and the other events in May, August and October will earn $1,600, $1,800 and $1,300 respectively.

  1. You are required to prepare a cash flow budget. Read the instructions below and discuss with your group and using the template provided complete the cash flow budget.

Getting Started

You have been provided with a worksheet in MS Word and MS Excel version to help you complete this exercise. You can choose to use the template handout provided either in Microsoft Word or Excel, or create your own in MS Excel.

            Budgeting Exercise – Cash flow forecast template
  Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Opening Balance 50,000 50,000                      
Income
Ticket Sales 285,000
Merchandising     6,000
Government Grant   50,000
Total 391,000
Expenditure
Salaries 120,000
Casual wages    10,000
Office & Admin Expenses

 

Expenses

   36,000
Travel & Transport    56,000
Venue Hire    24,000
Total 246,000                        
Closing Balance 145,000                        

 

  1. You are to present clear and logical recommendations on the cash flow budget to management. The report should be approximately 150 words and discuss the outcomes of the cash flow forecast and identify areas for improvement and new approaches to the budget. Explain the impact on customer service levels and colleagues in developing these new approaches.  It is important to present clear and logical recommendations for budget management.