The CFO of Walmart wants to get ahead of planning and forecasting and has put...
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Accounting
The CFO of Walmart wants to get ahead of planning and forecasting and has put you in charge of the deliverable. You and the finance team have one week to provide her with preliminary operational budgets for the next 12 months continuous. You have been provided the following estimates:
Sales will increase 23% in Q1 and increase by 8% in the other 3 quarters. The company does not plan to increase prices in the next 12 months.
COGS will increase each quarter: 12%, 18%, 10% and 5% respectively
Total operating expenses are estimated to decrease in the first half of the year by 15% respectively, then increasing by 3% each month thereafter.
If there are outstanding receivables, the company has implemented new procedures that will help them collect 35% of the prior year's accounts receivable balance. They expect to collect the 35% equally over the fiscal year.
Using the information above, prepare a comprehensive master budget for your company (in excel) and prepare a memo that explains the potential impact of the business' operational budget. Comment on if any improvements to the budget you believe should be made.
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