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

Cash-Flow and its use

Extracts from this document...

Introduction

M2 MINI INTRODUCTION In this coursework, I will explain what cash flow is and why is it useful to a business organisation. I will use JJ Supermarket to illustrate my explanation. I will show where does JJ Super market receives its inflow and how this inflow does and outflow of cash affects the JJ Supermarket. Cash flow means the flow of money in a business this includes in flow, money coming into the business (revenue) and out flow, money being spent by the business (total cost). Cash flow forecast is an easy way to keep track of money going in and out of the business. Cash flow forecast is used by financial department in order to check if there is any problem in the business. ...read more.

Middle

If the inflow is greater than the out flow, the business will make profit. This is a positive sign for the business. In order to take short-term actions in case of higher outflow, the JJ Supermarket can demand for credit terms with their stock supplier or could try to reduce the usage of electricity. That can even try to decrease their stock prices at in order to sell more units with minimum profit and try achieving break even. JJ Supermarket will have to maintain a regular cash flow position to run the business successfully. Maintain cash flow regularly helps the business in track of what is going on in their business. It is an essential way to keep an eye on each and every money spent by the business. ...read more.

Conclusion

JJ Supermarket's cash flow forecast was good and it was making profit. It did have some problems as in June and July they experienced their lowest revenue. Then the next month, august, was made even worse by having the largest amount of cost in the whole year. These three months of JJ Supermarket made their profit levels down. These three months had lowest revenue with high cost from the stock purchase. In order to solve this problem JJ Supermarket can try to reduce their normal levels of cost. They can try to buy less stock so they will have to sell fewer products to break even. Conclusion to this coursework, I have shown the problems that could be analysed by observing the cash flow. Generally, these implications are caused by irregular cash outflow, which could increase to very high level. ?? ?? ?? ?? Unit 3 - M2 Pranav Jadva ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Accounting & Finance 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 GCSE Accounting & Finance essays

  1. Marked by a teacher

    effective cashflow management

    4 star(s)

    THE USE OF BUDGETS IN PLANNING AND MONITORING BUSINESS FINANCES 1. What courses of action could be introduced to control the business's cash flow most effectively? "Cash is King"! Without cash flow there are nothing in business. Cash flow is the life blood of business and can be the primary indicator of the health of business.

  2. Marked by a teacher

    cash flow

    3 star(s)

    2.200 Opening Balance 5.000 14.500 17.000 17.200 19.400 Net Cash Flow 9.500 2.500 200 2.200 2.200 Closing balance 14.500 17.000 17.200 19.400 21.600 For example: I forecasts that in September we will experience cash inflows of �19000 and cash outflows of �9500, leaving a positive net monthly cash flow of �9500.

  1. Comsat case

    Financial Risk Given the 100 percent equity of Comsat's capital structure, it did not face any financial risk. This means that Comsat's total risk was equal to its business risk. In contrast, AT&T's debt-to-capitalization ratio was about 50 percent. Not only was AT&T's financial risk greater than Comsat's, but AT&T

  2. This report has been produced as evidence for Unit 9 - 'Financial Services' - ...

    30.00 30.00 30.00 30.00 30.00 30.00 Car insurance(Paul) 55.00 55.00 55.00 55.00 55.00 55.00 Pension 87.5 87.5 87.5 87.5 87.5 87.5 Dental insurance 30.00 30.00 30.00 30.00 30.00 30.00 Home content insurance 18.00 18.00 18.00 18.00 18.00 18.00 Car loan 240.00 240.00 240.00 240.00 240.00 240.00 Building insurance 25.00 25.00 25.00 25.00 25.00 25.00 Council Tax 70 70

  1. annual cash flow forecast

    regular payment system this make it easier for the business to plan and predict cash flows. Irregular in - and outflows - This is when the business is not getting the same amount of inflow every month or spending differently every month on outflow.

  2. Preparation of a cash flow forecast

    �50.00 �50.00 �50.00 �50.00 Total outflows �3,850.00 �4,100.00 �4,350.00 �4,600.00 �4,850.00 �5,100.00 Net cash flow �350.00 �100.00 �150.00 �400.00 �650.00 �900.00 Opening balance �5,000.00 �4,650.00 �4,550.00 �4,700.00 �5,100.00 �5,750.00 closing balance �4,650.00 �4,550.00 �4,700.00 �5,100.00 �5,750.00 �6,650.00 In the first 3 months January, February and March Wooden Wonders had a poor cash flow.

  1. Exploring business purposes

    The similarities are that: They both have to break even. They both have aims and goals they want to achieve. Also, they both want to keep there costs low. Objectives for BMW: * Increase sales * Increase number of costumers * Reduce costs Objectives for ST.Bartholomew: * Keep costs low * Meet customers targets (e.g.

  2. Identifying and describing the main financial service needs for a student starting at university

    24 hours a day through their nationwide network of over 30,000 cash machines, and abroad where you see the Cirrus logo. You could use the Cash card as a debit card, to pay for goods and services where you see the Solo logo and abroad where you see the Maestro logo.

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