CBM cash flow budget

CBM Cash Flow Budget

CBM cash flow budget shows a negative impression for seven of the nine months. The cash budget deviates from the cash budget principle of keeping a minimum of $50,000. That being the case for the next seven months, CBM is required to accept bank loans of at least 40,000 dollars and a maximum of 437,750 dollars in March and June, respectively.

Concerns as a Conservative Financial Manager

As a conservative financial manager, I would express concerns about the credit conditions we offer our consumers as well as the credit terms provided by our creditors. Credit conditions of both creditors and customers should match in order to eliminate substantial cash flow concerns. That calls for rationalization of accounts receivables and accounts payables where this will eliminate the discrepancy of cash demands and cash supplies.

Overspending and Cash Budget Analysis

From a cash budget analysis point of view, an overall overspending throughout the year with a good start and a downsized status in the close of the period could give me a point of rechecking the expenses, but this is not the case. The only immediate demand is to ensure that the internal and external policies subjected to CBM should be rational and compensate to one another avoiding the troughs and booms in the cash cycle as portrayed on the cash budget attached. CBM being a start-up company with cash flow issues at the beginning does not give a lot of pressure towards the delivery of cash but instead, reinforce policies around the industry performance which in the final months of October and November seem to have adopted and taken shape.

Bank's Perspective on CBM

From a Bank's perspective, the company poses a good standing position since after all the deficits during the year, CBM still offsets the demands and manages to close at a stable cash flow position of over $100K. As a Bank Manager, I would greatly welcome the company and offer them a loan since it will be more of a Factoring and discounting company's debtors. A company with enough current assets that poses some short-lived cash flow problems are a right bank's clientele since at all points of operation the bank can freeze all cash inflows to repay themselves first in case of liquidation or insolvency.