Kamaljit and Sharon’s cash-flow forecast

Instructions
Kamaljit and Sharon have been making sandwiches for 4 months. The business did well
in Apr to Jul and again in Nov and Dec. They hired temporary staff and bought a more
reliable van. January, however, is quiet and they have less cash so they ask you for
advice. In particular, Kamaljit wants to know if she can buy a new oven in March,
costing £2000.

Sales forecast

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
£700 £900 £1200 £4500 £5200 £5200 £4950 £900 £700 £720 £3500 £4700

Expenditure forecast

Item £
Extra staff £200 Apr to July and Nov to Dec
New van £5200 Dec
Fuel 75 per month
Adverts in paper £15 March and May
Expenses £1400 Jan to Mar, £1800 Apr to Jul, £1400 Aug to Oct
and £1800 Nov to Dec

Opening balance for January £1000

● Populate the cash flow template with the information above.

o (Once this has been done check with your lecturer to make sure the figures
are correct and that you can move to the next stage
● Complete the totals for Total Expenditure and the Total Column (Column N)
● You are now in a position to be able to complete the Total Income cell for January
and work out the closing balance.

Extension Questions

1. Kamaljit wants to know if she can buy a new oven in March, costing £2000
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2. If Kamaljit and Sharon are unable to purchase the Oven in March give your
reasons why.
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3. If Kamaljit and Sharon are unable to purchase the oven in March and it is an
emergency what other external source of finance might be available?
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4. Is there anything that Kamaljit and Sharon could do to improve Cash flow?
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