• Join over 1.2 million students every month
• Accelerate your learning by 29%
• Unlimited access from just £6.99 per month
Page
1. 1
1
2. 2
2
3. 3
3
4. 4
4
5. 5
5

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

Extracts from this document...

Introduction

﻿Task 1A BUSHRA'S BUSES - Cash flow forecast July August September October November December INCOME 20,000 20,000 18,000 16,000 15,000 15,000 EXPENDITURE Fuel 1,500 1,500 1,400 1,300 1,300 1,300 Insurance 1,000 1,000 1,000 1,200 1,200 1,200 Maintenance 2,000 2,000 2,000 3,000 3,000 3,000 Rent 1,800 1,800 1,800 1,800 1,800 1,800 Wages 12,000 12,000 12,000 12,000 12,000 12,000 Total Expenditure 18,300 18,300 18,200 19,300 19,300 19,300 Net Cash Flow 1,700 1,700 -200 -3,300 -4,300 -4,300 MONTHLY SUMMARY Opening Bank Balance 10,000 11,700 13,400 13,200 9,900 5,600 Net Cash Flow 1,700 1,700 -200 -3,300 -4,300 -4,300 Closing bank balance 11,700 13,400 13,200 9,900 5,600 1,300 Task 1B A, Suggest why the amount for fuel decreases over the period The main reason for the fuel decrease over the period is simply that where is the business is seasonal the amount of income decreases after the summer months. When the summer months end the amount of holiday tours start to recede. It is obvious that the fewer coach tours that operate require less fuel to function. This is clearly shown in the spread sheet as the income for the months from September to June start to decline and is reflected in the increase of fuel expenditure. B, Suggest a reason for maintenance costs rising in the autumn. ...read more.

Middle

As rent is a fixed cost it is not possible to change this but where wages is concerned it is considered to be a variable cost so can be changed. Where the wages expenditure remains the same at £120000 per month throughout the year it would be a logical step to hire some temporary staff. This would give the company the option to control its wage bill by only hiring staff when needed thus reducing the wage costs. The company will need to implement various credit control measures to ensure the smooth and profitable running of the business. To achieve positive and dynamic results she should implement the following. Cary out appropriate credit checks on her suppliers to ensure prompt and correct payment. This is vital to maintain a constant and smooth cash flow. As well as credit checks the option to give a reduced price for prompt payment as will benefit Bushra as it will give an incentive to pay on time and will give a good indication of the financial stability of the business which she is trading with. This would also be beneficial if the company can quire this arrangement with their suppliers to reduce their own expenditure. The introduction of a maximum credit limit of £1000 per customer with a 30 day credit would help stabilise the cash flow where customers are involved. ...read more.

Conclusion

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

# Related AS and A Level Accounting & Financial Management essays

Finance: Finance is, ultimately the most important issue to any business. They will want to try and gain the highest level of profits possible. Pretty much any business will be looking to improve their financial results.

2. ## Sources of Finance

company: Larger companies may obtain financing by equity financing due to the needs of wider pool of finance for company growth (Joseph 2008).

1. ## Introducing Accounting - Purpose, Information, Statements and Ledgers

Lucky S. W. Trading and Mega Trax Plastic Sdn Bhd are also expected their business will continue operate in the future. They want to make sure that their companies can earn income in the future. For example, Lucky S. W.

2. ## Sources of finance for a new business.

In the future, if the business wants to raise further capital in order to expand or invest in more modern equipment, it could issue some further shares. However, these new shares can only be sold to people with a unanimous agreement of all the current shareholders.

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

Cash flow highlights: In the month of July, the closing balance was -£50.00 which was negative that was because they spent £14000.00 on shelves and railings. This meant that they spent even more money than their opening balance which was £13700.00.

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

R&D expenses growth rate is at 5% - To use this 4-year average growth rates, we assume that the scale of operations of this plant is constant so we need to adjust such cost growths to account for inflation. If the scale increases we should consider growths in costs on percentage of sale basis 2.2 Cost of capital: a.

1. ## Evaluate the importance of cash flow and breakeven for the effective management of business ...

scenarios it allow you to see how your business will fare if you suddenly hit tough times or better than expected trading conditions. Knowing how this effects your cash position allows you to make informed and educated decisions, and you?ll be more confident of running your business.

2. ## Financial forecasting for business, Start up costs, running costs, variable and fixed costs

if the production volume increases by 10%, so total variable costs amount also have increasing 10%. Another definition of variable costs is: the costs of the company, for variables production of resources to pay in the short-term. For example, if £20 costing of food product is used in food production,

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