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In: Business and Management

Submitted By AnishaG777
Words 792
Pages 4
D1-Justify actions a business might take when experiencing cash flow problems

In this task based on the work that I completed in P3, I will be making recommendations on how I think that Kerri’s soft drinks should progress and trying to avoid any possible cash flow problems.

The screen dump above shows that when Kerri first started her business she had no money, this meant that she would have to get a loan for £450 from her dad to help her start up the business. So for the first month it shows that she had no sales. However when it came to February there was no money coming into Kerri’s business which explains why there are minuses in the cash flow forecast and as you look at the closing balance for March, This shows that the minuses from February carried on until March. Personally In my opinion I think that Kerri should have either got an overdraft from her bank or maybe worst case scenario asked family or friends for another loan to make sure that her business was secured for February. I also think that an overdraft would be a smarter solution as she has a small business and taking out a big loan could put her in the same situation or even in debt causing her to just close the business altogether where she won’t be able to get out of because she won’t be making enough money to pay it off. Another solution would be that because her dad gave her £450 in January she should have asked to for him to give her half of it in January and the rest in February; which means she would have got £225 for the first two months to try and avoid those minuses within the cash flow forecast.

As I have stated before, the problem was that Kerri had was that she had no money coming into her business in February so it caused a problem because she is short of £200 cash in February so she had to wait until March where she made sales of £450 so…...

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