Reference no: EM132596658

Using data in the spreadsheet attached to this assignment, show a cash budget for Plains Medical Center for the first quarter of Fiscal 2021 (October - December, 2020). You can assume that the Medical Center starts the fiscal year with $6,000,000 in cash on its balance sheet.

Once you compile that budget consider the following issues:

Assume the Medical Center would like to implement a policy to keep a minimum cash balance each month that equals one month of salary expense plus one month of supply and other expenses. In addition, they are required to keep three month's worth of mortgage payments in cash on hand each month. So your minimum cash balance must be the sum of those salary/expense items noted here, plus one year of debt payments. What is the minimum cash balance that Plains Medical Center should keep each month based on these assumptions?

Look at your cash budget calculations. Are there any months where the cash balance in that month falls below that minimum? If so, what management actions can you take to address this issue? Be specific!