The opening balance Essay Example for Free

The opening balance EssayIn this notes forecast I will analyse where the Steves traffic can improve on whether they are fashioning a profit or not. Also I need to constitute where they have regular in immix and outflows and irregular inflow and outflows. I will also comment on how the fresh business can maintain more regular numbers.January and FebruaryIn January the sales is 17,000 it increases by 2,000 to 19,000.the bestow income in January was 32,000 it reduces by 13,000 to 19,000 be lay down the loan was one kill income. It an irregular money inflow which only happened in January. These profit can be use to expand or give the staff bigger salaries for there hard work. A regular hard cash inflow is good for business you see how much silver passing game in to business. This makes it easily to predict future sales. Fresh business had total of 174,000 for there sales tax.In January and February mad material has regular cash outflows departure out of the busines s. For gas, electric and piddle bills fresh business has to pay the 700 each month. This regular cash outflow is very good for the business. The business can identify how much money is exhalation out business. This is the alike with salaries which 4,000, take aim for premises was 1,500 and advertising that was. However in January there was no lease payment this typify the total white plague is 17,000 this increases in February to 18,200.The monthly net cash flow in January is 15,000 and in February is 800. It has fall by 14,200. I think the business should slump the salaries to 3000 because the monthly cash flow tells you that they are making a loss. The oddment balance is 25,000 and in February is 25,800. The termination balance has increases by 800 this because their no loan interpreted out. walk and AprilThe opening balance for the start of March is 25,800 and for April it was25,600. Is has decrease by 200. This is because loan was cash inflow and the sales r stock-stil lue has decreases by 3000. The sale revenue is 18,000 in March and in April it was 15,000.this is because there were lower demands for intersection heart and soul less people brought them. Loan is irregular payment so no money from loan came into the business both months.In March and April lancinating material has regular cash outflows passing play out of the business 10,000 each month. For gas, electric and water bills fresh business has to pay the 700 each month. This regular cash outflow is very good for the business. The business can identify how much money is going out business. This is the same(p) with salaries which 4,000, lease for premises was 1,500 and advertising was 200. However in March there was lease payment this mean the total expenditure is 18,200 this is the same with April 18,200.The new cooking equipment, delivery van and fuel for van are an irregular cash outflow at nothing in both March and April and the bills are a regular cash outflow at 700 for both month s. The total expenditure for both months is 18,200 because there are an equal amount of payments. By reducing salaries and increasing advertisement the business will earn more money, Steve will then not make a loss at the closing balance.The monthly net cash flow in both months is prohibit at -200 and -3,200. This will have a speculative impact on the business. The closing balance is 25,000 and 22,400 for each of the months a decrease of 3,200. This has had a bad impact the business on Steves business as he is making less money and will eventually lead to bankrupt if he carry on like this.whitethorn and JuneThe opening balance for May is at 22,400 and for June at 14,500. Steve has made a decrease of 7,900 this is because of the sales revenue as the demand kept on going up and down for the front months. The sales revenue for May is at 11,000 because of a high demand Steves however this decreases to 8,000 in June because of a lower demand for Steves product even thoughSteve has bou ght the same amount of raw materials. There is no loan and the total income for both months is at 11,000 and 8,000 a decrease of 3,000.The expenditure stays the same however, the delivery van and the fuel for the van both being an irregular cash outflow starts to kick in at 8,000 only in May and 200 for both months. The total expenditure for May is at 18,900 and this is because of the cost for the delivery van. Irregular expenditure is bad for the company because you dont k at present when it going to happen or how much going to cost. It had effect the business badly because it had a monthly cash flow. However, Steve has made a dramatic value between this month and all the others as the total expenditure totals up to 10,900 for June it was better than may total expenditure 18,200 the reason why there is a decrease is the delivery van was an irregular outflow.The monthly net cash flow is at -7,900 for May and -2,900 for June this is a decrease of -5,000 and this is decreasing hopefu lly meaning it will time we will see more positive monthly cash outflows.The closing balance for May is at 14,500 and for June at 11,600 a decrease of 2,900. This is having a bad impact on the business because of the monthly net cash flow and total expenditure are both negative path Steves business is not making profit only loss. It could be costly in the long run. I think Steve should lower his salary to 3000 since they are not having positive monthly net cash and total expenditure.July and gildedThe opening balance for July starts off with 11,600 however the opening balance for August is 6,700 a decrease of 4,900. This is because of the sales revenue for the previous month. The sales revenue for July is 6,000 however this increases to 8,000 the next month an extra 2,000 profit. Although they had the same amount of raw materials price they sell more. No loan has been taken out for any of the months. The reason why there increase in Steve sales revenue, is that the demands for Stev e product have increase.The total expenditure for July and August is the same at 10,900. This is having a good impact on the business as this will result in a regular cash flow which will then allow Steve to easily predict future cash flows and make plans to help advance his business.The monthly net cash flow for July is at a negative at -4,900 however this is getting better and the money should eventually go to a positive as in August the price lowers to -2,900 and increase of 2,000. This must be because of the sales in the months before and the sales revenue in these months. The closing balance is at 6,700 for July a decrease from the previous months and this gets worse at it progresses to the next month and the closing balance goes to 3,800. This reason for this decrease is the sales revenue prevised month.September and OctoberThe opening balance starts off with 3,800. This is having a bad impact on the business as Steve will not be able to pay the bills or pay for stock and he w ill then eventually go bank-corrupt. In October there is a slight improvement as the opening balance is 3,900. The sales revenue starts to remember as for September it is 11,000 a huge improvement from the previous months. For October there is a higher increase 18,000. This is having a good impact on the business.The raw materials increases from 2,500 to 12,500 from October to December to all of this change the prices of raw material increase significantly to 12,500. The reason for why the prices of raw material have gone up is the demands for the product has gone up. Therefore Steve has to buy more raw materials for his customers. Regular cash outflow is good for the business because there always has to be money going out of your business. This makes it easier for the business to prepare them for the money going out of the business.The Monthly net cash flow starts off with a positive for September at 100 this is a huge improvement from the previous months. The monthly net cashflow goes to -2,900 a huge drop in October from previous months. This is because of the raw material costs have increased.Septembers closing balance stays at a positive 3,900 and increase of 100 from the previous months. On the other hand, for October although it stays at a positive the closing balance drops to 1,000 and this is because of the raw materials costs.November and DecemberThe opening balance starts to drop from the previous month to now at 1,000 in November. This is because of the raw material costs from the previous months. This drops even more in December to -18,900. This is having a very bad impact on the business as they are not starting off with a positive amount. This will not allow them to operate. This is the only month that has had a negative opening balance and will affect the business.The sales revenue for November is at 21,000 which is a strong amount and has had an improvement from the previous months. This sales revenue has a bigger improvement and goes to 22,0 00 in December. This is having a good impact on the business. The raw materials cost stays at 12,500 which will have a bad impact on the business if the total price of expenditure doesnt go higher than the previous month.New cooking equipment is one of fresh business irregular expenditure. On November 20,000 went out of business. This is really bad for the business. Irregular expenditure is bad for the company because you dont know when it going to happen or how much going to cost. Although this decreases to 20,900 in the next month this will still have a bad impact on the business and may cause them to go bank-corrupt.The monthly net cash flow for November is at -19,900 and this is having a bad impact on the business. For the last month the monthly net cash flow goes to a positive 1,100. However, this still wont help the business. The closing balance for November is at -18,900 a huge decrease from thepositive previous month and the closing balance for the last month is at -17,800 a decrease from the previous month but will not help the business.Finally, the total opening balance for this year is at 131,400. This figure has been affected by the negative amount at the last month. The total monthly net cash flow for the whole year is at -27,800 this is because of the over expenditure and has affected the business earning them a smaller and even negative closing balance. The total closing balance for the year is at 103,600 and this has been affected by the negatives.Key wordsTotal expenditure All of cost added up. The total amount of money that is pass on a product in a given time periodMonthly net cash flowEquals cash receipts disconfirming cash payments. In simple English it tells you if youre making a profit or loss.Total income All of your income added up (income is money you get from your goods and service) coin outflows The total money going out from a company in a given period of time. Cash outflows include expenses such as salaries, supplies, and mainte nance, and leaseCash inflows The total money going in to a business or company for sales of goods and services. Cash outflows include income such as sales revenue, loan etc.