question archive Mountain Village Clinic: Analyze and discuss the following: Patient volume at the clinic is highly seasonal because the vast majority of the business occurs during the ski season, which generally runs from December through March
Mountain Village Clinic: Analyze and discuss the following: Patient volume at the clinic is highly seasonal because the vast majority of the business occurs during the ski season, which generally runs from December through March
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Mountain Village Clinic: Analyze and discuss the following: Patient volume at the clinic is highly seasonal because the vast majority of the business occurs during the ski season, which generally runs from December through March. Consider the following: should seasonal variations be incorporated into the clinic’s target cash balance? In other words, should the balance be higher during months when cash needs are greater?
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Answer:
Certainly seasonal variations should be taken into account while calculating the cash balance. This is because during the peak season the clinic will receive greater amount of cash and also its expenses will be higher. This needs to be computed to arrive at the correct estimate of the cash balance. During the lean period the need for cash will be lower and hence the business needs to estimate the cash balance accordingly..
