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Hi, I need help with essay on Module Title:Managing Financial Resources and Decisions Assessment Title:Fun for Kids Limited. Paper must be at least 2000 words. Please, no plagiarized work!Based from t
Hi, I need help with essay on Module Title:Managing Financial Resources and Decisions Assessment Title:Fun for Kids Limited. Paper must be at least 2000 words. Please, no plagiarized work!
Based from the cash flow forecast, the critical times where short-term financing would be necessary would be in June, when there will be a deficit of £21,750. This is largely brought about by the large cash requirement to pay for the semi-annual rental fee of £30,000. The month of June is also the time for the quarterly payment of electric,
gas, and other costs as projected by Ms. Wantage. June also signals the start of season of high wage payments.
Ms. Wantage can improve the cash flow of the company by enticing customers to pay cash instead of a thirty day credit sales on party bookings. This can be done by giving more incentives to cash paying customers, such as giving extra freebies to kids or small gifts to parents, or extending extra hours of use of facilities. Probably a differential in party package price can also be offered between cash sales and credit sales customers. Another way of improving cash flow is reducing the number of days for credit sales. Instead of 30 days, the company can probably shorten it to 15, 20, or 25 days.
Aside from the revenue side, the expense side can also be adjusted in order to improve the cash position of the company. For example, lump sum payments on rent, utilities, and other expenses paid on quarterly basis can be spread during months when there are cash surpluses. From the cash flow constructed for May to December 2007 for the company, one would notice that in June 2007, cash expenses such as the semi-annual rent payment and quarterly payment on electricity and gas consumption contributed to huge demand for cash, at a time when the company is just starting to build up its cash reserves from sales revenues. What could be done is to have a proper timing for large payments so that cash disbursements do not occur simultaneously on a single month alone.
Another strategy is for Ms. Wantage to get credit lines from suppliers. By extending credit privileges, suppliers will be able to give Ms. Wantage some
