Get instant access to this case solution for only $14

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 A Word File and An Excel File 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. 

21636969581.png
31636969581.png
11636969580.png

Case Study Questions Answers

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

 
           

Get instant access to this case solution for only $14

Get Instant Access to This Case Solution for Only $14

Standard Price

$25

Save $11 on your purchase

-$11

Amount to Pay

$14

Different Requirements? Order a Custom Solution

Calculate the Price

Approximately ~ 1 page(s)

Total Price

$0

whatsapp chat icon

Hi there !

We are here to help. Chat with us on WhatsApp for any queries.

close icon