Garden Fresh is a company that grows fresh mangoes in the Letsitele area. They supply fresh mangoes to most retail outlets in South Africa. Although sales have been great, cash flow is not doing so well. This is a worrying factor for the owner, Babs Banana. She calls you in distress the next morning seeking urgent assistance. You are provided with the following information: The total sales were R 4 million for the year, of which 20 % was for cash. Retail customers still owed R 1 million to Garden Fresh at year-end. The cost of sales of these goods was R 2 400 000. The company also buys various packaging materials and agricultural ingredients as input costs. The total amount of purchases was R 2 million for the year, of which R 600 000 were still owed at year-end. The total stock value at the beginning of the year was R 600 000. 1. Calculate, interpret and explain: The average payment period All calculations must be calculated and rounded. NO decimals. In each calculation indicate the formula that you are using AND also interpret your answer and how you would explain your answer to the management of Garden Fresh. 2. Calculate, interpret and explain: The cash conversion cycle All calculations must be calculated and rounded. NO decimals. In each calculation indicate the formula that you are using AND also interpret your answer and how you would explain your answer to the management of Garden Fresh.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Garden Fresh is a company that grows fresh mangoes in the Letsitele area. They supply fresh mangoes to most retail outlets in South Africa. Although sales have been great,
You are provided with the following information:
The total sales were R 4 million for the year, of which 20 % was for cash. Retail customers still owed R 1 million to Garden Fresh at year-end. The cost of sales of these goods was R 2 400 000. The company also buys various packaging materials and agricultural ingredients as input costs. The total amount of purchases was R 2 million for the year, of which R 600 000 were still owed at year-end.
The total stock value at the beginning of the year was R 600 000.
1. Calculate, interpret and explain: The average payment period
All calculations must be calculated and rounded. NO decimals.
In each calculation indicate the formula that you are using AND also interpret your answer and how you would explain your answer to the management of Garden Fresh.
2. Calculate, interpret and explain: The cash conversion cycle
All calculations must be calculated and rounded. NO decimals.
In each calculation indicate the formula that you are using AND also interpret your answer and how you would explain your answer to the management of Garden Fresh.
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