Q3a: Based on Figure 3 information produce a cash flow forecast for Amna's business. Q3b: Identify those months where there may be a financial issue. For each month, analyse the issue and make recommendation(s) to solve these. Figure 3 Complete a cash flow forecast for January to June from the following information for Amna's business: • A business starts with £13,000 in the bank. • It will take out a loan of £11,000 in March. • It will pay back the loan at £900 per month beginning in April. • It will sublet its premises and receive £7,000 in January and in April. • In March it will sell a van for £5000 and buy a new one costing £10,000. • Its overheads will be £9,000 from January to March and then increase to £12,000 per month. • It will pay £6,000 per month in wages. • In April it will pay a tax bill of £9,000. Its sales and purchases are as follows: Jan Feb March April May June £ £ £ £ £ £ Sales 5000 6700 6000 6400 7000 7000 Purchases 5000 2300 3200 2400 5500 4400

Q3a: Based on Figure 3 information produce a cash flow forecast for Amna's business. Q3b: Identify those months where there may be a financial issue. For each month, analyse the issue and make recommendation(s) to solve these. Figure 3 Complete a cash flow forecast for January to June from the following information for Amna's business: • A business starts with £13,000 in the bank. • It will take out a loan of £11,000 in March. • It will pay back the loan at £900 per month beginning in April. • It will sublet its premises and receive £7,000 in January and in April. • In March it will sell a van for £5000 and buy a new one costing £10,000. • Its overheads will be £9,000 from January to March and then increase to £12,000 per month. • It will pay £6,000 per month in wages. • In April it will pay a tax bill of £9,000. Its sales and purchases are as follows: Jan Feb March April May June £ £ £ £ £ £ Sales 5000 6700 6000 6400 7000 7000 Purchases 5000 2300 3200 2400 5500 4400

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter6: Managing Cash Flow

Section: Chapter Questions

Problem 12SEP

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