FUNDAMENTALS OF FINANCE (FIN242)

SEMESTER OCTOBER 2023 – FEBRUARY

2024 (20234)
GROUP ASSIGNMENT 1
MARKS: 20%
SET 2

INSTRUCTIONS: In a group of 4-5 members, you are required to complete the group
assignment which covers Topic 3: Financial Forecasting and Planning. Please answer ALL
questions and start your write up in a new page. The assignment should not be more than five
(5) Pages, and excluding cover page, table of contents and reference. Submission dateline is
on 15th December 2023 (week 10), 5.00 pm.

QUESTION 1
Daya Corporation is in the process of estimating its cash requirement for its project in Pulau
Pinang. The firm’s actual and forecasted sales as follows:

Month Total Sales Credit sales

February 400,000 350,000
March 750,000 550,000
April 350,000 250,000
May 240,000 100,000
June 450,000 300,000
July 400,000 200,000
August 460,000 300,000

a) 30 percent of credit sales are collected one month after sales and the remaining balance
is collected in the following month.

b) Raw materials equal 50 percent of total sales and they are purchased on credit one
month before the anticipated sales.

c) The supplier is paid 60 percent in the following month of purchase, 20 percent will be paid
two months after purchase and the balance of 20% will be paid in the third month after
purchase.

d) Salaries and wages are 15 percent of the current total sales and are paid in the month
incurred.

e) Other monthly fixed expenses are rent RM1, 200, insurance RM1, 500 and
depreciationRM1, 900.
f) A new machine costing RM220, 000 will be installed and paid in June.

g) Dividends of RM17, 000 will be received in the middle of each quarter.

h) The ending cash balance in March 31, 2023 is RM40, 000 and the monthly minimum
cash requirement is RM16, 000.
From the information provided, prepare a cash budget for Daya Corporation for the 2nd
Quarter of the year.

QUESTION 2
Puan Jessie is a financial manager of Sarabay Sdn Bhd. She is responsible for preparing the
cash budget of the company for the second quarter of 2023. The company sales and
forecasted sales are as follows:

Month Sales (RM)

February 75,000
March 60,000
April 80,000
May 85,000
June 90,000
July 100,000

i) The customer pays cash for 50 percent of sales in the month of sales, and the balance is
credit sales. Twenty (20) percent will be collected a month after sales, and another 30
percent will be collected two (2) months after-sales.

ii) Purchases of raw materials 70 percent of sales and are made two months in advance of
the sale The supplier is paid 100 percent in the month of the following purchase.

iii) The monthly fixed expense is RM8, 000.

Prepare a cash budget for the second quarter of 2023.

QUESTION 3

Refer to the following statement of financial position for Berjaya Berhad.

BERJAYA BERHAD
STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2022 (RM)

Cash 180,000 Account payable 288,500

Account receivable 796,500 Accruals 90,500
Inventory 598,500 Notes payable 396,000
Prepaid expenses 195,000 Long term debt 997,500
Net fixed assets 1,098,000 Common stock 700,000
Retained earnings 395,500

Total Assets 2,868,000 Total Liabilities and Equities 2,868,000

Additional information given:

i. The firm is operating at full capacity.
ii. The company’s current sales are at RM12, 785,000 and it is expected to increase
toRM16,400,000 in 2023.
iii. Net profit margin is 6 percent.
iv. Dividend payment amounted to RM359, 900 in 2022.
You are required to prepare a pro-forma statement of financial position and estimate the
amount of additional fund needed for Berjaya Berhad for the year 2023.
QUESTION 4

Based on the Serba Holdings statement of financial position below, calculate the additional
fund needed for the company.

SERBA HOLDINGS
STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2022 (RM)

Cash 30,000 Accruals 24,000

Account receivable 25,000 Notes payable 28,000
Inventory 30,500 Debentures 27,000
Net plant and equipment 30,500 Common stock 26,500
Retained earnings 10,500
TOTAL ASSETS 116,000 TOTAL LIABILITIES & 116,000
EQUITY

Additional information:
i. Sales for 2022 were RM185, 000 and it is expected to increase 40% in 2023.
ii. Net income for 2022 was RM10, 500.
iii. The current dividend payment was RM5, 300.
iv. The company is operating in full capacity.