From the course: Business Math

Unlock the full course today

Join today to access over 22,600 courses taught by industry experts or purchase this course individually.

Forecast the timing and amount of a business loan

Forecast the timing and amount of a business loan

From the course: Business Math

Start my 1-month free trial

Forecast the timing and amount of a business loan

“

- Most of us have practiced, hopefully, in budgeting our time. If you don't plan things ahead and budget your time, you're at risk of not getting the most important things done. In addition, if you don't have a plan, you can't tell whether you are ahead of schedule or woefully behind schedule to the extent that you won't be able to get everything done. This same idea of planning ahead applies to small businesses who are forecasting the need for future bank loans. Consider the following forecasted information for Derrald Company, a hypothetical small business. Derrald prepared these forecasts in November looking ahead to the first four months of the upcoming year. The budgeted cash collections in January, 100,000. February, 80,000, March, 75,000, and in April, a whopping 146,000 forecasted cash collections. Budgeted cash payments, January, $97,000 for operating expenses. February, 85,000 for operating expenses, 17,000 for dividends to owners, and 25,000 to buy new equipment. March…

Contents