Directions For hi-tech- (I may need help on broker) create a pro forma cash flow budget for the organization for five years – 2010 -2014. Express all data in yearly format (not quarterly or monthly) b.    Create three sections Operating, Investing and Financing i.    create line items within each section that relate to each of these sections. ii.    Show inflows as a positive value and outflows as a negative value iii.    At the bottom, show change in cash (sum of operating, investing and financing), beginning and ending cash. Please reference Chapter 24 materials. Read and understand the entire chapter. Be sure and pay particular attention to the information contained in the following sections: a) 24-1The Financial Plan b) 24.2 Cash Budgeting (Note this table illustrates three columns–current, forecast and change, you will forecasting five years of data, so total of six columns- current and years 2010 – 2014) Note Table 24-1 illustrates the operating section of the Cash Budget. This table appears on pp 708. For the line items “capital expenditure” and “mortgage payment” create a separate section in your cash budget for Investing and Financing respectively and include these and any other relevant cash flows in these two sections. c) 24.3 Pro Forma Financial Statements

In order to create a pro forma cash flow budget for hi-tech, we will need to analyze and forecast the organization’s cash inflows and outflows for the years 2010 to 2014. The cash flow budget should be expressed in yearly format, not quarterly or monthly.

To start with, we need to divide the cash flow budget into three sections: operating, investing, and financing. This division will help categorize the different sources and uses of cash for the organization.

In the operating section, we will include all cash inflows and outflows related to regular business operations. This can include revenue from sales, cash received from customers, and cash payments for operating expenses such as rent, salaries, and marketing expenses. Each of these line items should be recorded as a positive value for inflows and a negative value for outflows.

The investing section will focus on cash flows related to investments in long-term assets. This can include cash used for purchasing new equipment, property, or other assets. It can also include cash received from the sale of assets. Again, record inflows as positive values and outflows as negative values.

The financing section will include all cash inflows and outflows related to the organization’s financing activities. This can include cash received from issuing debt, such as loans or bonds, as well as cash paid for interest or debt repayments. Cash received from issuing equity, such as stocks, or cash used for dividends can also be included in this section. Similarly, inflows should be recorded as positive values and outflows as negative values.

At the bottom of the cash flow budget, we should calculate the change in cash by summing up the operating, investing, and financing sections. This will give us the net increase or decrease in cash for each year. Additionally, we should include the beginning and ending cash balances for each year.

In order to complete this task, it is important to reference Chapter 24 of the course materials. Specifically, pay attention to the information contained in sections 24-1: The Financial Plan, 24.2: Cash Budgeting, and 24.3: Pro Forma Financial Statements. These sections contain valuable insights and examples that will help guide the creation of the pro forma cash flow budget.

Please note that for line items like “capital expenditure” and “mortgage payment,” it is necessary to create separate sections in the cash budget for investing and financing, respectively. Include these line items, along with any other relevant cash flows, in the appropriate sections.

By following these guidelines and referring to the provided chapter materials, it will be possible to create a comprehensive pro forma cash flow budget for hi-tech for the years 2010 to 2014.

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