# Jackson Automotive Systems

Solution Id Length Case Author Case Publisher
2099 462 Words (4 Pages) William E. Fruhan, Wei Wang Harvard Business School : 914505
This solution includes: A Word File and An Excel File

The company needs a new loan to finance the purchase of equipment. It was necessary to make an investment in new equipment purchases as some essential components of its machinery had worn off, and it had become crucial for the business to replace them as soon as possible or else its production will be disrupted, resulting in further delayed order fulfillment. The additional borrowing is urgent but not on an immediate basis as it will be until August when Jackson Automotive System will purchase the machinery.

The cash budget of the company for the four months period is as follows:

 Cash Budgets for the Months June July August September Opening Cash Balance 4,994 5,087 10,791 11,672 Add: Sales Receipts 3,744 11,679 6,868 6,121 Less: Material Purchased 2,876 5,200 5,200 5,200 Less: Operating Expenses 750 750 750 750 Less: Interest Cost 25 25 37 37 Closing Cash Balance 5,087 10,791 11,672 11,806

The pro forma Income Statement and the Balance Sheet for the four months period are as follows:

 Income Statement for the Months Ended June-September In 000s June July August September Total Sales Revenue 10,779 6,268 6,121 6,285 29,453 Less: Cost of Goods Sold 5,810 5,810 5,810 5,810 23,240 Gross Profit 4,969 458 311 475 6,213 Operating Expenses 750 750 750 750 3,000 Depreciation and Amortization 120 120 130 130 500 Interest Expense 25 25 37 37 124 Interest Income 100 102 216 233 651 Profit before Tax 4,174 (335) (390) (209) 6,239 Less: Income Taxes 1,419 (114) (133) (71) 1,101 Net Income 2,755 (221) (258) (138) 2,138 Dividends 1,200

Amount to Pay

## Calculate the Price

Approximately ~ 1 page(s)

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