The Cyrus Brown Manufacturing is responsible for organizing the business finance to meet their monthly expenses

The Cyrus Brown Manufacturing is responsible for organizing the business finance to meet their monthly expenses. One of the many reasons for placing finance from other sources because business has the fixed expense of $60,000 per month concerning salaries, lease, and miscellaneous expenses. With these circumstances, CBM management must consider the loan arrangements from the bank. The overdraft facility of the short-term loan facility of the bank will assist the management to control the fixes.
The minimum level of credit is required to be $60,000 per month, which is the fixed expense of CB. It is very important for the management to control the expenses of the business to improve the cash inflows. Because of the control of lease and salary expenses the miscellaneous expense must be condensed. Financing amount would be $222,500.
CBM weakest point is management. The management of the business is paying their suppliers to early as compared to collecting them first from buyers first. The credit period of the CBM is almost zero. Since the debtor’s period is three months this is creating cash problems for the business. So, it is important for CBM management to improve their debtor’s days and attempt to hold the funds for creditor’s
Based on CBM cash flows, the bank must interest for financing purposes. The sales of the CBM are increasing each month, along with June capital investments which is an indication of future cash inflows. The element of good future cash inflows and profits, the bank must create good business relations with CBM. However, the bank must inform the management of CBM to improve their funds collection period of three months to improve the cash management of the business.