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Balance sheet for Dolores boutique

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Timurcan Ozdil M1 & D1 The cash flow forecast is showing the money coming into the business and the money going out of the business. Dolores boutique has a lot of problems going on in the business. I will be explaining these various problems. Cash flow forecasts are useful as they help decision making and also helps predicting cash shortages. January In January Dolores boutique had an sales income of £37800 and rent income of £250 which makes a total income of £38050. They ended the month with a closing balance of -£3185. The reasons behind this are that they spend too much money. For Dolores boutique to make a positive closing balance they need to increase their sales or decreases their costs. ...read more.


They can lower the stock from £15300 to £11000. This will help them get a positive cash flow March In March Dolores boutique made £31500 from sales which are lower than they made the previous month and the month after. Dolores boutiques closing balance for March was -£6225. This set the business back a lot as they are more in the negative balance for the next month. Dolores boutique can avoid negative cash flow by decreasing their purchases from £22500 to £19500. July In July Dolores boutique made £31500 from sales which are a lot lower compared to the previous months. The reason for this can be that the summer season is coming up and people will want to save their money for holidays or trips. ...read more.


However Dolores boutique made a loss that month as they spent £44000 on stock. Although Dolores boutique made the most amount of money from sales they could not convert this into profit or a positive closing balance. Dolores boutique can avoid negative cash flow by decreasing their expenditure. For example they can decrease the amount they spend on stock at the end of the month, if Dolores boutique was to spend £35000 on stock rather than £44000 they can have a positive cash flow. The potential dangers that can occur with these changes can affect the business a lot. For example if Dolores boutique increases their rent prices the people that are renting the property might leave. Another potential danger will be that lowering employee wages will mean that the employees will be less motivated and possible leave the job. ...read more.

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