Cash Planning continued

Joe talks to his customers and suppliers and agrees that:

1. The main customers will pay on or before 21st day of the month following delivery

2. The supplier who has an interest in seeing Joe’s business develop gives him 60 day credit terms

He also speaks to an asset finance company who will provide funding to buy the van over three years(*) but they are unwilling to finance the machine stating that it is ‘too specialised’.

(* a 10% deposit plus the VAT to be paid up front)

However the machine supplier agrees to 60 day payment terms provided Joe signs up before the end of the month.

His other plan assumptions are unchanged – So what is the revised cash plan?

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