FINANCIAL ANALYSIS

Financial Analysis

Financial Analysis

TASK 1

Cash Budget

Cash Budget is an estimation of the inflow of cash and outflow of cash for a business. The cash budget is estimated for a specific time period. The analysis through cash budgets shows the ability of the business or individual to meet the operating activities of cash for the companies budgeting. The cash budget below shows the total disbursements of cash and the sales made by Yardley Wood Store.

Yardley Wood Store

Cash Budget

Yardley wood store

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Cash Disbursements

Rental

£5000

£5000

£5000

£5000

£5000

£5000

Plant and Machinery

£780,000

-

-

-

-

-

Additional Equipment

£350,000

£160,000

£105,000

£105,000

-

-

Operational Cost

-

£62,000

£62,000

£62,000

£62,000

£62,000

Total Disbursements

£1,135,000

£227,000

£172,000

£172,000

£67,000

£67,000

Cash Revenues

Sales

£500,000

£500,000

£640,000

£640,000

£640,000

£640,000

Cash Surplus/Deficit

£ (635,000)

£273,000

£468,000

£468,000

£573,000

£573,000

b) Finance needed for 6 months

Amount of finance needed in the first six months of operations includes the total disbursement of cash in the first six months which amounts to:

Months

Cash Disbursements

1

1,135,000

2

227,000

3

172,000

4

172,000

5

67,000

6

67,000

Total

1,840,000

c) Factors to be considered in Cash Budget

The planning of a money plan is a critical administration task. While some small organizations may have the capacity to get by for a period without rationing, sagacious entrepreneurs will understand its imperativeness. A money plan can secure an organization from being unassuming for regular changes in money stream or arrange an organization to exploit startling amount rebates from suppliers.

While there are different sorts of plans that could be ready, for example anticipated or expert forma budgetary proclamations, a money plan is an administration get ready for the most significant element of an organization's suitability its financial position. An organization's money position verifies how suppliers will be paid, how an investor will react to an advance ask for, how quick an organization can develop, and also specifically impacting profits, expands to manager's value, and productivity.

Income

The principal factor figure in arranging a plan is the income. The point when budget a plan you have to concentrate on your net wage, not gross. The measure of cash taken home every month is the thing that you use to pay your commitments. We could even now decide to record sums that get deducted from your pay on a pre-tax premise, for example retirement commitments, in a differentiate range of your budget worksheet.

Costs

When planning the budget one should consider each cost. Anything that is used throughout the span of the month must get recorded in the budget, and that can demonstrate challenging in a few cases. You should incorporate even the little buys you make at the neighbourhood comfort store to get a faultless aggregate for your plan.

Balance

The following significant component in arranging a plan is accomplishing adjust. The side of your plan worksheet that records pay must equivalent the side for overheads. More wage than overheads is a superb issue to have recently allotted the abundance to a funds account or other activity. In the event that after you record your plan items you have a bigger number of liabilities than wage that is a more genuine issue that requires you to diminish costs and perhaps recognize better approaches for profiting.

Goals

An alternate key part you have to address when getting ready a plan is the manner by ...