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Tasks 6, 7, 10, 11, 12 Coming Soon! In meantime do your Breakeven Calculations

Tasks 6, 7, 10, 11, 12 Coming Soon! In meantime do your Breakeven Calculations. Unit 2 Section C. 6 Evaluate cash flow statements in general and evaluate your cash flow forecast in particular. Use text books or internet to describe cash flows in general. What are they?

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Tasks 6, 7, 10, 11, 12 Coming Soon! In meantime do your Breakeven Calculations

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  1. Tasks 6, 7, 10, 11, 12 Coming Soon! In meantime do your Breakeven Calculations Unit 2 Section C

  2. 6 Evaluate cash flow statements in general and evaluate your cash flow forecast in particular. • Use text books or internet to describe cash flows in general. What are they? • What sections are there in a cash flow forecast? • Why are they used? • What does you cash flow show you on a month to month basis? Starting with the first month and discuss any significant highs and lows financially. • If you go into the minus you must discuss the consequences (bank overdraft etc) • Do you make a profit on a month to month basis? • Do you end the year with a profit? Consider how much capital you have introduced... • You should have already discussed every income and expenses sub headings in 2 and 3

  3. 7. Describe and explain the Profit & Loss and Balance sheet your cash flow has generated. What does this mean for your business in the short run? • Use text books or internet to summarise in general what profit & loss accounts and balance sheets are. Why are they used? • Profit and Loss – Discuss the gross and net profit figures. Are they positive in the short term? • Balance sheet – Discuss your: • Liabilities (how much you owe) • Assets (how much you own or are owed) • It is a snap shot of business health. Is your business in a strong position?

  4. 10 Describe and analyse your Break Even calculations. • Show all of your calculations • How did you do your calculations? What did you consider and what did you leave out? (start up costs such as equipment. Explain why?) • Display your breakeven as a graph

  5. 11 Evaluate Break Even in general and evaluate your Break Even position in particular. • General info on what breakeven is. • What was your result? • Is the result positive? Achievable? • How many units have you forecasted to sell? What is the difference between that and your BE point? • Could you improve you BE? Lower fixed costs or increase your contribution, think of ways.

  6. 12 Describe how you could use Cash flow, Break Even or Budgeting to monitor the financial aspects of the business. • For each of the identified tools, discuss how you need to use them in order to ensure your business is healthy. • Eg. Break even, you need to know how many units to sell per month....Gives you targets • Cash flow, you need to know if you have enough cash to pay debts (expand)

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