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Report detailing an analysis of Gary Tredwells Cash Flow

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Report detailing an analysis of Gary Tredwell's Cash Flow In this report, I will be breaking down your cash flow forecast in detail and will be making suggestions and pointing out problems and telling you how I would change them. A cash flow forecast is a statement that shows the expected movements of the cash in and out of a business. It is normally prepared on a 12 month basis but predictions will more than likely be done on a monthly basis. Cash Inflows: Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec 16850 1900 2600 3000 3200 3600 3700 3900 4000 4100 4200 4500 Cash out flows: Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec 16950 1610 3190 3470 3480 3630 3880 3785 3905 4045 3975 4155 This shows cash inflows from January to December compared with the outflows from January to December I will be using these figures to make recommendation for the issues that I have found. Cash inflows: Sales: Issue: At the start it looks like you have good sales. However you outflow started to become higher than your sales you can see this in six of the months on the statement. ...read more.


I have noticed that you have spent �400 on a trolley jack, there are also I few other that you have spent a lot of money on some of which I don't think were really necessary. This money could have been better spent in other areas of the business. Recommendation: Instead of buying all of your equipment and spending a lot of money in one go it might benefit you more if you had rented equipment like the trolley jack and just brought the essential equipment. This is more expensive in the long term but more beneficial in the short term. This will take half of the capital introduced to the business at the start of the month. This is because you will be paying small amounts each month for the equipment instead of a huge lump some at the beginning. Revenue Expenditure - Overheads: Issue: General expenses consist of things like rent, gas, electricity, insurance and power. At the moment you are paying �200 a month for your rent this is a very good price and only �150 every three months for you light and power which is also very reasonable. ...read more.


From what I see you have a lot of expenses to sales. You could start up new methods of selling your product such as advertising, cold calling set up an internet site. Closing Balance - Issue: Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec 100 390 -200 -670 -280 -310 -490 -375 -280 -225 0 345 The figures above show your closing balance. Unfortunately for you the majority are negative. However towards the end of the year it is looking better which means if you can keep this going your business has a high chance of survival. You need to keep your closing balance positive because when applying for a bank loan the cash flow forecast for you business is one of the things that they will look at. Recommendation: In the first couple of months as you can see your business isn't doing to great but if you follow the recommendations I have suggested then hopefully your business will turn around like it has started to do in December. If the closing is consistently kept positive then applying for a loan will be essential for the business as it could be used to invest in to the business. However at the moment you would not be able to apply for a bank loan as the majority of months are negative. ...read more.

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