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

The following report analyses the cash flow forecast situation for Strobe Leisure plc.

Extracts from this document...

Introduction

To: Finance manager From: Subject: Cash flow forecast Date: February 2001 Introduction The following report analyses the cash flow forecast situation for Strobe Leisure plc and will cover the following areas: - * An explanation of the purpose of a cash flow. * An explanation of why a company such as Strobe needs a cash flow forecast. * A six-month cash flow forecast for Strobe Leisure plc. * An analysis of Strobes cash flow forecast situation at present. * Final recommendation and conclusion. Main findings section 1: An explanation of a cash flow forecast. Drawing up a cash flow forecast shows whether there is enough cash available to pay salaries and settle debts on time. ...read more.

Middle

Main findings section 3: A six month cash flow forecast for Strobe July August September October November December Opening bank balance 100,000 Cash inflows sales �42,000 �34,000 �40,000 �44,000 �48,000 �50,000 Total receipts �42,000 �34,000 �40,000 �44,000 �48,000 �50,000 Cash outflows Purchases �26,000 �24,000 �20,000 �22,000 �20,000 �19,000 Expenses Wages/salaries �5,000 �5,000 �5,000 �5,000 �5,000 �5,000 Rent/rates �1,000 �1,000 �1,000 �1,000 �1,000 �1,000 Insurance �500 �500 �500 �500 �500 �500 Light/heat �400 �400 �400 �400 �400 �400 Telephone �100 �100 �100 �100 �100 �100 Repairs �200 �200 �200 �200 �200 �200 VAT �100 HP/leasing charges �150 �150 �150 �150 �150 �150 Interest on loan �30 �30 �30 �30 �30 �30 Loan repayments �200 �200 �200 �200 �200 �200 Sundry expenses �300 �300 �300 �300 �300 �300 Total repayments �33,880 �31,880 �27,980 �29,880 �27,880 �26,980 Net ...read more.

Conclusion

The overdraft is often used as a short term solution to cash flow problems. Advantages 1 The business only pays interest on an amount overdrawn each day. 2 Cheap way of borrowing. Disadvantages 1 Must be paid back with interest. Short term loan These include starter loans which provide short-term finance for a new business. Advantages 2 It's quick to arrange Disadvantages 3 Must be paid with interest, security is usually required. Cut costs Money can be saved by cutting down on material bought. Advantages 4 Reduces storage cost of high stock levels Disadvantages 5 It must be done carefully to meet customers orders. An overdraft should be taken as it's the cheapest option, and interest only has to be paid on the amount of days taken. It's quick to get and no security is needed. ...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. Sources Of Finance

    This source of finance is more reliable and dependable than using sales of assets to raise funds as leases are for a fixed period of time and the costs are in form of interest charges for the asset so will generate more money than selling the businesses assets would as

  2. A2 Business CourseWork

    It means that customers may shop around each for the overall cheapest shop. * Trade cycle: The place in a trade cycle will have a huge influence in customer confidence and ultimately demand. In a recession people will be less prepared to buy luxury, expensive products whereas in an economic boom they will be more inclined to buy these products.

  1. Profitability and Liquidity

    However, I expect to still get sales during these months as October, November, and December are months of which people do Christmas shopping, and with the aid of advertising a personalised T-shirt maybe the perfect Christmas present. In total the cash flow forecast shows me that I am expecting a

  2. Unit 5 D1 - example of how a business may deal with cash flow ...

    While purchasing the computer equipment they could make an agreement with the creditor that they won?t pay them straight they will pay them during certain time limit which meant that the money would not go out of the business there and then.

  1. Accounting Case Study Questions. BUSHRA'S BUSES - Cash flow forecast

    This can be monitored and reflected in cash flow forecasts. However a more detailed explanation will divulge that a revenue or expense stream that changes a cash account over a given period. Cash inflows usually arise from one of three activities - financing, operations or investing - although this also

  2. Cash Flow Report

    I think you pay a lot of money for light and heat. Light and heat cost 900 a quarter which is 300 each month. In my opinion this is not fair and you should change and transfer into another company which be cheaper.

  1. Estimate the cost of equity appropriate for the evaluation of the incremental cash flow ...

    - Capital investment are based on historical data in 1980-1984 period (Exhibit 8) - Variable and fixed costs: we use 4-year average growth rates calculated based on Exhibit 8. So non-power variable cost growth rate is 11%, fixed cost growth rate is 6%, selling expenses growth rate is 7% and

  2. I am going to produce a report which assesses the working capital management of ...

    In this part of my work, I am going to identify and explain the key ratios, using the information I gathered from M&S annual report. Ratio is the term applied to a variety of calculations used to compare the results of a business over time or to compare the results of two or more business in the same business sector.

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