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In this assignment, you are required to prepare a sales plan by month and in total include a schedule of projected cash collections from sales and accounts receivable. Furthermore, prepare a purchases plan add a schedule of projected cash payments for purchases and accounts payable. Present a clear and appropriate statements with required calculations and explain your answer.
Requirements Table of Contents 1)Executive Summary 2)Problem Statement 3)Qualitative and quantitative Analysis with Reference to Appendix 4)Recommendations 5)Appendix for 3) Qualitative and quantitative Analysis with Reference to Appendix this is the Requirements to solve 1. (a) Prepare a sales plan by month and in total. Include a schedule of projected cash collections from sales and accounts receivable, by month and in total. (b) Prepare a purchases plan in units and in dollars. Include a schedule of projected cash payments for purchases and accounts payable, by month and in total. Note: the cost of inventory on hand is assumed to be released to cost of goods sold before costs for the purchase of additional units, i.e., a FIFO cost flow is assumed for all months. 2. Prepare a projected contribution format income statement, by month and in total. 3. Prepare a projected balance sheet as of September 30. Hint: for July and August, compute the line-of-credit interest expense and then link (with a 1 month lag) to interest payments on the projected statements of cash flow (or vice versa). For September, compute the interest expense and link forward to interest payable on the projected balance sheet. 4. Prepare projected statements of cash flow, by month and in total. The first statement of projected cash flow is presented in an internal budget format. The second statement of projected cash flow is presented in an external financial reporting format. Note: projected cash flow should be consistent across formats. 5. Use the data in cells A14:H16 within the Graph worksheet to create a cost-volume-profit graph. Ensure that your graph closely resembles a standard CVP graph to receive full credit. 6. Use the income statement and calculate the breakeven in sales dollars for the quarter. Then calculate the margin of safety ratio for the quarter. 7. Refer to the baseline projected income statement and statements of cash. (a) Compute and interpret AAPs "quality of income", where quality of income = operating cash flow ÷ net income. Operating cash flow = cash collections - cash disbursements before capital acquisitions. (b) Explain why income is greater than operating cash flow and identify at least two specific areas in which Al Ain Products may not be effectively using cash (focus on working capital components). [Hint: examine operating cash flow items from the external format cash flow statement]. 8. Refer to the baseline and review the selected benchmarking information provided by Al Ain Products` benchmarking consultant, as shown in Exhibit 4. (a) Compute (annualize as necessary) AAP`s financial metrics for the projected quarter. (b) Discuss how well AAP`s expected performance measures compare to its key competitor and the industry averages? Explain your results.