CASH FLOW FORECASTS

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  • Created by: _Holly98
  • Created on: 05-04-16 13:06

SUPPORT APPLICATIONS FOR LOANS

ALL BUSINESS REQUIRE LOANS ENABLE TRADE SUCCESFULLY

SHORT TERM LOANS REQUIRE PURCHASE SUPPLIES / BUSINESS NEGOTIATE LONGER TERM FINANCE MAJOR PROJECTS

MORE LIKELY LEND EVIDENCE FINANCIAL PLANNING REASSURING

REASURRING BANK MANAGEMENT KNOWS IMPORTANCE AVOID CASH FLOW CRISIS

MORE CONFIDENCE MAKE REPAYMENTS WHEN DUE

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HELP AVOID UNEXPECTED CASH FLOW CRISIS

HIGH PROPORTION FAILURES DUE CASH FLOW DIFFICULTIES

CASH FLOW FORECAST HELP ACOID 

ENSURE BUSINESS DO NOT SUFFER PERIOD SHORT CASH / UNABLE PAY DEBTS

IDENTIFY NOT ENOUGH CASH - MAKE NECESSARY ARRANGEMENS FIX PROBLEM

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CONSTRUCTING CASH FLOW FORECAST

CASH IN - MONTHLY BASIS

CASH OUT - STATE EXPENDITURE GOODS / SERVICES

NET MONTHLY CASH FLOW - OPENING / CLOSING BALANCE

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ANALYSING CASH FLOW FORECAST

TIMING KEY ISSUE UNDERPINNING MANAGEMENT

GUIDE MAKING DECISIONS

SEEK ENSURE SUFFICENT CASH INFLOWS PRIORT OUTFLOWS

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BREAK EVEN ANALYSIS

HELP DECIDE BUSINESS IDEA PROFITABLE / VIABLE

LEVEL OUTPUT / SALES GENERATE PROFIT

SUPPORT APPLICATION LOAN

ASSESS IMPACT CHANGES LEVEL PRODUCTION

ASSES EFFECTS DIFFERNT PRICES

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CALCULATING BREAK EVEN OUTPUT

CONTRIBUTION = DIFFERENCE REVENUE AND VARIABLE COSTS

CONTRIBTUION = REVENUE - VARIABLE COSTS

USED PAY FIXED COSTS

BREAK EVEN OUTPUT = FIXED COSTS / CONTRIBUTION PER UNIT

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ADVANTAGES BREAK EVEN ANALYSIS

FORECAST EFFECT VARYING NUMNERS / IMPLICATIONS CHANGE PRICE

SIMPLE - NO NEED TRAINING

QUICK - PROVIDE IMMEDIATE RESULTS

VALUE SUPPORTING BUSINESS APPLICATION BANK LOAN

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DISADVANTAGES BREAK EVEN ANALYSIS

NOTHING LEVEL OF SALES

SIMPLIFICATION REAL WORLD - CALCULATING AVERAGE UNLIKELY ACCURATE

DIFFICULT MULTIPLE PRODUCTS - DIVDE FIXED COSTS

COSTS DONT RISE STEADILTY

ONLY AS ACCURATE DATA

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GROSS PROFIT MARGIN

GROSS PROFIT MARGIN = GROSS PROFIT X 100 / REVENUE

ALLOWS COMPARISONS BETERRRN DIFFERENT BUSINESS

DOESNT INCLUDE COSTS

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OPERATING PROFIT MARGIN

OPERATING PROFIT MARGIN = OPERATING PROFIT X 100 / SALES REVENUE

USEFUL INTERESTED PEFROMANCE BUSINESS 

HIGHER PROFIT MARGIN LEAD GREATER OVERALL PROFIT

CAN LEAD FALL MARGIN - REDUCE PRICES ATTRACT SALES HOPE HIGHER PROFIT

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PROFIT FOR THE YEAR

PROFIT YEAR MARGIN = PROFIT FOR YEAR X 100 / REVENUE

TAKES TAX / OTHER EXPENDITURE ACCOUNT

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USE OF DATA FINANCIAL DECISIONS

STRAIGHTFORWARD - TECHNOLOGY

USE RANGE FACTORS MAKE DECISIONS

REQUIRE LOAN - ESSENTIAL - IMPORTANT EVIDENCE

CONSIDER:

SUFFIENCT CAPITAL

EFFECT CASH FLOW

PRODUCT GENERATE PROFIT

OPPURTUNITY COSTS

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