• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Balance sheet for Dolores boutique

Extracts from this document...

Introduction

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.

Middle

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.

Conclusion

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.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Accounting & Financial Management section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Accounting & Financial Management essays

  1. Finance And Cas Flow

    This has the same unlimited liability as a sole trader but has two or more people to share the risk with if the business is unsuccessful. The business venture can also have other investors who are called sleeping partners, as they invest their money in to the business but do

  2. Profit & Loss Accounts and Balance sheet.

    Debtor Payment Period: - Debtor's payment period in the year 2005 was only 0.89 days but it has been decreased only by 0.1 in the following year 2006 to 0.88 days and again in the following year (2007) it has decreased by 0.2 days to 0.86 days.

  1. A2 Business CourseWork

    Having a large business in a town can be a real advantage to a council for this very reason. Businesses are constantly trying to win the approval of people and councils benefit from this because they will help fund things for the people of the community.

  2. Business Income and Expenditure

    a business newly they may worry businesses might able to pay back the money on time. So they check the credit history if they have good report they may able to give out as much loan as they can could trust them to pay back within the limited time.

  1. The maintenance of accurate records supplies the company with the financial data that assists ...

    Double entry As mentioned earlier in order for a business to be successful it needs to record and monitor all its financial transaction. This could be done through a manual double entry accounting system or through a computerised system.

  2. Autralia's Retail Loan Rate Changes

    When that market closed, it left a considerable hole in the funding of Australian household demand for mortgages. Australian banks raise most of their liabilities onshore, but there is an important role for offshore borrowing as well. Figure Figure In the early months of the crisis, the global market has

  1. Finance, cash flow and insolvency

    All the profit he made, when he was trading as a sole trader can be used for expansion. Bank overdraft: He can agree an overdraft limited with the bank, so he can spend a bit more then he has in the bank.

  2. Capital Expenditures

    In this situation, acquisition of either corporation is worthwhile since each has an IRR greater than their respective discount rates, but since IRR gives the project's compound rate of return, the project providing the higher compound rate of return should be selected which means that Corporation B is preferred to Corporation A.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work