Summary - Finance

Sarah and jacks clash flow:
1. Cash flow forecast for Sarah and jack’s customized clothing business:
mont Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 0ct
h
Sales 1000 2500 1000 2000 1500 1500 2500 3000 3500 3500 1500 1500
(£)
Cost 300 750 300 600 450 450 750 900 105 105 450 450
of
stock
(£)
Other 1080 1100 1150 1150 1150 1150 1150 1150 1150 1150 1150 1150
expe 0
nses
(£)
Loan 10,50 - - - - - - - - - - -
recei 0
ved
(£)
Loan - 300 300 300 300 300 300 300 300 300 300 300
repay
ment
(£)
Net - 1250 -750 -50 0 0 300 650 1050 1050 0 0
cash 10,30
flow 0
(£)



2. Times of Concern for Cash Flow:
 November and January: These months exhibit negative cash flow due to high initial
expenses and loan repayments, potentially causing cash shortages.
3. Actions to Reduce Cash Flow Problems:
 Negotiate Repayment Terms: Sarah and Jack can approach the bank to renegotiate
the loan repayment schedule, starting with smaller repayments or a grace period to
ease the initial financial strain. Expense Management: They could stagger certain
expenditures (like equipment purchases or advertising) to match higher revenue-
generating months, ensuring a better cash flow alignment.