Btec level 2 business unit 3 m1

1919 Words Dec 14th, 2014 8 Pages
Assignment Task 2 M3
Ahmed Hassan

In this cash forecast I will analyse where the Steve’s business can improve on whether they are making a profit or not. Also I need to identify where they have regular inflow and outflows and irregular inflow and outflows. I will also comment on how the fresh business can maintain more regular numbers.

January and February

In January the sales is £17,000 it increases by £2,000 to £19,000.the total income in January was £32,000 it decreases by £13,000 to £19,000 because the loan was one off income. It an irregular cash inflow which only happened in January. These profit can be use to expand or give the staff bigger salaries for there hard work. A regular cash inflow is good for business you know how
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The total expenditure for May is at £18,900 and this is because of the cost for the delivery van. Irregular expenditure is bad for the company because you don’t know when it going to happen or how much going to cost. It had effect the business badly because it had a monthly cash flow. However, Steve has made a dramatic improvement between this month and all the others as the total expenditure totals up to £10,900 for June it was better than may total expenditure £18,200 the reason why there is a decrease is the delivery van was an irregular outflow.

The monthly net cash flow is at -£7,900 for May and -£2,900 for June this is a decrease of -£5,000 and this is decreasing hopefully meaning it will time we will see more positive monthly cash outflows.

The closing balance for May is at £14,500 and for June at £11,600 a decrease of £2,900. This is having a bad impact on the business because of the monthly net cash flow and total expenditure are both negative means Steve’s business is not making profit only loss. It could be costly in the long run. I think Steve should lower his salary to £3000 since they are not having positive monthly net cash and total expenditure.

July and August

The opening balance for July starts off with £11,600 however the opening balance for August is £6,700 a decrease of
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