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Question:

Financial management for public, health, and not-for-profit organizations.

Henry's Clinical Diagnosis and Management by Laboratory Methods E-Book.

Financial management for nonprofit organizations Policies and practices.

Question:
Introduction

The report aims to identify the various types the of depictions which are seen to be related to Biff’s Cabinet shop as per the given case study. Some of the various type the of the aspects of the report which has been further able to state on the relevant information related to the analysis of the market which has been shown as per the analysis which is undertaken to generate the potential sales figure which is expressed in terms of the thee dollar value. The different types of the secondary data search have weighed the heavily on the outcome found as per the market analysis. The report has been further able to include the S.W.O.T. analysis and a Competitive Analysis. The next part of the discussions as included the financial estimates which has been listed with Break-Even Income Statement, clear Income Statement Scenario Analysis, statement of Assets Needed: Equity and Debt Conscerns, one year of cash flow and statement of the Financial Commitment on the part of the principals.

About the company

As per the given case, Biff’s cabinet shop is a company involved in the construction of the cabinets.  It has been determined that Biff was on a six-month unemployment insurance and realistically decided on selling of part-time kitchen cabinets for many friends. The main operations of the company were seen with BFF contacting his cabinet supplier. The supplier indicated that there had been not retailer available in the Sudbury area who would be interest to be a retailer for Biff. There main agreement of the relevant information was done between a friend in the real estate business. He showed him several ways to hire a commercial space in the range of 22/square foot.

Market Analysis

Target Market Analysis

Biff Cabinet Shop should focus on the contacting the architects and the contractors who deal in luxury home market segment. In this way Biff Cabinet shop will be able to get strong leads and make personal recommendations to the owners of the home. As per the decreasing sales value of the company, the main target customers should be focused on the individuals belonging to middle income group. In this way the company will be having better chances of increasing the sales (Policy 2016).

SALES BUDGET:

 

Low Range- Oak

Low Range- European

Med. Range- Oak

Med. Range- European

High Range- Oak

High Range- European

 

Month

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

MONTHLY SALES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June

3

$5,600

$16,800

1

$5,200

$5,200

3

$7,200

$21,600

1

$5,680

$5,680

3

$11,200

$33,600

1

$6,560

$6,560

$89,440

July

3

$5,600

$16,800

 

$5,200

 

4

$7,200

$28,800

2

$5,680

$11,360

4

$11,200

$44,800

1

$6,560

$6,560

$108,320

August

2

$5,600

$11,200

 

$5,200

 

3

$7,200

$21,600

1

$5,680

$5,680

 

$11,200

 

 

$6,560

 

$38,480

September

5

$5,600

$28,000

1

$5,200

$5,200

 

$7,200

 

 

$5,680

 

 

$11,200

 

 

$6,560

 

$33,200

October

 

$5,600

 

 

$5,200

 

1

$7,200

$7,200

 

$5,680

 

 

$11,200

 

 

$6,560

 

$7,200

November

1

$5,600

$5,600

1

$5,200

$5,200

 

$7,200

 

 

$5,680

 

 

$11,200

 

 

$6,560

 

$10,800

December

 

$5,600

 

 

$5,200

 

 

$7,200

 

 

$5,680

 

 

$11,200

 

 

$6,560

 

$0

January

 

$5,600

 

1

$5,200

$5,200

 

$7,200

 

 

$5,680

 

 

$11,200

 

 

$6,560

 

$5,200

February

 

$5,600

 

1

$5,200

$5,200

2

$7,200

$14,400

 

$5,680

 

 

$11,200

 

 

$6,560

 

$19,600

March

1

$5,600

$5,600

 

$5,200

 

1

$7,200

$7,200

1

$5,680

$5,680

1

$11,200

$11,200

 

$6,560

 

$29,680

April

2

$5,600

$11,200

 

$5,200

 

2

$7,200

$14,400

1

$5,680

$5,680

1

$11,200

$11,200

1

$6,560

$6,560

$49,040

May

2

$5,600

$11,200

 

$5,200

 

5

$7,200

$36,000

2

$5,680

$11,360

1

$11,200

$11,200

1

$6,560

$6,560

$76,320

TOTAL

19

 

$106,400

5

 

$26,000

21

 

$151,200

8

 

$45,440

10

 

$112,000

4

 

$26,240

$467,280

CASH RECEIPTS SCHEDULE:

 

Low Range- Oak

Low Range- European

Med. Range- Oak

Med. Range- European

High Range- Oak

High Range- European

 

Month

Unit Installed

Av. Selling Price

Total Sales

Unit Installed

Av. Selling Price

Total Sales

Unit Installed

Av. Selling Price

Total Sales

Unit Installed

Av. Selling Price

Total Sales

Unit Installed

Av. Selling Price

Total Sales

Unit Installed

Av. Selling Price

Total Sales

TOTAL CASH RECEIPTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June

3

$5,600

$16,800

 

$5,200

 

 

$7,200

 

 

$5,680

 

 

$11,200

 

 

$6,560

 

$16,800

July

3

$5,600

$16,800

1

$5,200

$5,200

3

$7,200

$21,600

1

$5,680

$5,680

3

$11,200

$33,600

1

$6,560

$6,560

$89,440

August

2

$5,600

$11,200

 

$5,200

 

3

$7,200

$21,600

2

$5,680

$11,360

4

$11,200

$44,800

1

$6,560

$6,560

$95,520

September

3

$5,600

$16,800

1

$5,200

$5,200

3

$7,200

$21,600

1

$5,680

$5,680

 

$11,200

 

 

$6,560

 

$49,280

October

2

$5,600

$11,200

 

$5,200

 

1

$7,200

$7,200

 

$5,680

 

 

$11,200

 

 

$6,560

 

$18,400

November

 

$5,600

 

 

$5,200

 

 

$7,200

 

 

$5,680

 

 

$11,200

 

 

$6,560

 

$0

December

1

$5,600

$5,600

1

$5,200

$5,200

 

$7,200

 

 

$5,680

 

 

$11,200

 

 

$6,560

 

$10,800

January

 

$5,600

 

1

$5,200

$5,200

 

$7,200

 

 

$5,680

 

 

$11,200

 

 

$6,560

 

$5,200

February

 

$5,600

 

1

$5,200

$5,200

2

$7,200

$14,400

 

$5,680

 

 

$11,200

 

 

$6,560

 

$19,600

March

1

$5,600

$5,600

 

$5,200

 

1

$7,200

$7,200

1

$5,680

$5,680

 

$11,200

 

 

$6,560

 

$18,480

April

2

$5,600

$11,200

 

$5,200

 

1

$7,200

$7,200

1

$5,680

$5,680

1

$11,200

$11,200

 

$6,560

 

$35,280

May

2

$5,600

$11,200

 

$5,200

 

3

$7,200

$21,600

2

$5,680

$11,360

1

$11,200

$11,200

1

$6,560

$6,560

$61,920

TOTAL

19

 

$1,06,400

5

 

$26,000

17

 

$1,22,400

8

 

$45,440

9

 

$1,00,800

3

 

$19,680

$4,20,720

PURCHASE BUDGET

 

Low Range- Oak

Low Range- European

Med. Range- Oak

Med. Range- European

High Range- Oak

High Range- European

 

Month

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

MONTHLY PURCHASE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June

3

$3,500

$10,500

1

$3,250

$3,250

3

$4,500

$13,500

1

$3,550

$3,550

3

$7,000

$21,000

1

$4,100

$4,100

$55,900

July

3

$3,500

$10,500

 

$3,250

 

4

$4,500

$18,000

2

$3,550

$7,100

4

$7,000

$28,000

1

$4,100

$4,100

$67,700

August

2

$3,500

$7,000

 

$3,250

 

3

$4,500

$13,500

1

$3,550

$3,550

 

$7,000

 

 

$4,100

 

$24,050

September

5

$3,500

$17,500

1

$3,250

$3,250

 

$4,500

 

 

$3,550

 

 

$7,000

 

 

$4,100

 

$20,750

October

 

$3,500

 

 

$3,250

 

1

$4,500

$4,500

 

$3,550

 

 

$7,000

 

 

$4,100

 

$4,500

November

1

$3,500

$3,500

1

$3,250

$3,250

 

$4,500

 

 

$3,550

 

 

$7,000

 

 

$4,100

 

$6,750

December

 

$3,500

 

 

$3,250

 

 

$4,500

 

 

$3,550

 

 

$7,000

 

 

$4,100

 

$0

January

 

$3,500

 

1

$3,250

$3,250

 

$4,500

 

 

$3,550

 

 

$7,000

 

 

$4,100

 

$3,250

February

 

$3,500

 

1

$3,250

$3,250

2

$4,500

$9,000

 

$3,550

 

 

$7,000

 

 

$4,100

 

$12,250

March

1

$3,500

$3,500

 

$3,250

 

1

$4,500

$4,500

1

$3,550

$3,550

1

$7,000

$7,000

 

$4,100

 

$18,550

April

2

$3,500

$7,000

 

$3,250

 

2

$4,500

$9,000

1

$3,550

$3,550

1

$7,000

$7,000

1

$4,100

$4,100

$30,650

May

2

$3,500

$7,000

 

$3,250

 

5

$4,500

$22,500

2

$3,550

$7,100

1

$7,000

$7,000

1

$4,100

$4,100

$47,700

TOTAL

19

 

$66,500

5

 

$16,250

21

 

$94,500

8

 

$28,400

10

 

$70,000

4

 

$16,400

$2,92,050

CASH PAYMENT TO SUPPLIERS SCHEDULE:

 

Low Range- Oak

Low Range- European

Med. Range- Oak

Med. Range- European

High Range- Oak

High Range- European

 

Month

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

Unit Sold

Av. Selling Price

Total Sales

TOTAL CASH PAYMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June

3

$3,500

$10,500

 

$3,250

 

 

$4,500

 

 

$3,550

 

 

$7,000

 

 

$4,100

 

$10,500

July

3

$3,500

$10,500

1

$3,250

$3,250

3

$4,500

$13,500

1

$3,550

$3,550

3

$7,000

$21,000

1

$4,100

$4,100

$55,900

August

2

$3,500

$7,000

 

$3,250

 

3

$4,500

$13,500

2

$3,550

$7,100

4

$7,000

$28,000

1

$4,100

$4,100

$59,700

September

3

$3,500

$10,500

1

$3,250

$3,250

3

$4,500

$13,500

1

$3,550

$3,550

 

$7,000

 

 

$4,100

 

$30,800

October

2

$3,500

$7,000

 

$3,250

 

1

$4,500

$4,500

 

$3,550

 

 

$7,000

 

 

$4,100

 

$11,500

November

 

$3,500

 

 

$3,250

 

 

$4,500

 

 

$3,550

 

 

$7,000

 

 

$4,100

 

$0

December

1

$3,500

$3,500

1

$3,250

$3,250

 

$4,500

 

 

$3,550

 

 

$7,000

 

 

$4,100

 

$6,750

January

 

$3,500

 

1

$3,250

$3,250

 

$4,500

 

 

$3,550

 

 

$7,000

 

 

$4,100

 

$3,250

February

 

$3,500

 

1

$3,250

$3,250

2

$4,500

$9,000

 

$3,550

 

 

$7,000

 

 

$4,100

 

$12,250

March

1

$3,500

$3,500

 

$3,250

 

1

$4,500

$4,500

1

$3,550

$3,550

 

$7,000

 

 

$4,100

 

$11,550

April

2

$3,500

$7,000

 

$3,250

 

1

$4,500

$4,500

1

$3,550

$3,550

1

$7,000

$7,000

 

$4,100

 

$22,050

May

2

$3,500

$7,000

 

$3,250

 

3

$4,500

$13,500

2

$3,550

$7,100

1

$7,000

$7,000

1

$4,100

$4,100

$38,700

TOTAL

19

 

$66,500

5

 

$16,250

17

 

$76,500

8

 

$28,400

9

 

$63,000

3

 

$12,300

$2,62,950

S.W.O.T. analysis

Strength

The main strengths of the company are listed below as follows:

  • The increasing nature of the units sold for the long-range oak over the month as per the sales budget is considered as the main strength of the company
  • The decreasing nature of the average purchase as per the data of the sales budget is also conducive in minimising the cost
  • The increasing trend of Net profit before tax in the month of March, April and

Weakness

  • The decreasing trend of the total sales for the products such as Long-Range Oak, and high range Oak is identified as the major weakness for the company
  • It has been further depicted that as per the purchase budget the total sales of low range Oak has reduced considerably
  • The gross profit has been discerned with a fluctuating trend and in most of the months within the year it is seen to be decreasing in nature (Evans 2015)

Opportunities

  • The purchase budget has further stated that Med. Range Oak sales has the scope of improvement in terms of sales
  • Some of the significant nature of the other opportunities has been further seen to be traced in form of Med. Range European products which has been evident with the increasing cash payment to the supplier’s schedule (Finkler et al.2016)
  • The progressive financial performance after March, April and May has been considered as a good opportunity as a starting point for the subsequent financial years

Threats

  • The decreasing nature of the sales depicts that other companies stand a better chance in driving the demand in their favour
  • The increasing cost of capital is a major threat as the company may get completely liquidated in the next few years of time
  • The decreasing profit and debt burden are also a major threat to the company’s existence in the competitive market environment (Heizer 2016).
Competitive Analysis

The high-end cabinet market is understood with the concept of service and support which is more likely to be paid at the time of offering. The competitors range from the several retailers available in the market despite of the fact individual competitors have been able to deliver a quality product. There have been four factors which has governed the cost of the kitchen products. These factors have been identified in form of the “Scope, Product, Design, and Services” (Zietlow et al. 2018). In majority of the cases people make the mistake of sizing the” project and the choice of brand name products will make for the best results”. However, in general the design of the products and the services offered are seen to be having the highest impact on the competitive edge to the company. The has significant scope of promoting the designs in the social media sites and other online platforms (Titman, Keown and Martin 2017).

Financial Analysis
1. A Break-Even Income Statement

BREAK-EVEN INCOME STATEMENT

Particulars

Amount

Amount

Sales Revenue

 

$467,280

Variable Cost:

 

 

Purchase Cost

-$292,050

 

Installation Cost

-$24,400

 

Shipping Cost

-$10,980

 

Total Variable Cost

 

-$327,430

CONTRIBUTION

 

$139,850

CONTRIBUTION MARGIN

 

29.93%

Fixed Costs:

 

 

Store Rent

-$10,612

 

Rent for Portable Sign

-$375

 

Promotional Items

-$600

 

Business Cards

-$250

 

Salary to Biff

-$36,800

 

Salary to Mary

-$23,200

 

Travelling Expenses

-$8,000

 

Incorporation Tax

-$1,500

 

Accountant Fees

-$1,500

 

Heat & Hydro Expenses

-$7,375

 

Lease Expenses for Photocopier

-$1,800

 

Office Supplies Expenses

-$900

 

Telephone Cost

-$2,220

 

Interest Expenses

-$1,788

 

TOTAL FIXED COSTS

 

-$96,920

 

 

 

NET PROFIT

 

$42,930

 

 

 

BREAK EVEN POINT IN DOLLARS

 

$323,839

A clear Income Statement Scenario Analysis

INCOME STATEMENT:

Particulars

June

July

August

September

October

November

December

January

February

March

April

May

TOTAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Revenue

$89,440

$108,320

$38,480

$33,200

$7,200

$10,800

$0

$5,200

$19,600

$29,680

$49,040

$76,320

$467,280

Cost of Goods Sold:

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase Cost

-$55,900

-$67,700

-$24,050

-$20,750

-$4,500

-$6,750

$0

-$3,250

-$12,250

-$18,550

-$30,650

-$47,700

-$292,050

Installation Cost

-$1,200

-$4,800

-$4,800

-$3,200

-$1,200

$0

-$800

-$400

-$1,200

-$1,200

-$2,000

-$3,600

-$24,400

Shipping Cost

-$540

-$2,160

-$2,160

-$1,440

-$540

$0

-$360

-$180

-$540

-$540

-$900

-$1,620

-$10,980

Total Cost of Goods Sold

-$57,640

-$74,660

-$31,010

-$25,390

-$6,240

-$6,750

-$1,160

-$3,830

-$13,990

-$20,290

-$33,550

-$52,920

-$327,430

GROSS PROFIT

$31,800

$33,660

$7,470

$7,810

$960

$4,050

-$1,160

$1,370

$5,610

$9,390

$15,490

$23,400

$139,850

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Store Rent

-$884

-$884

-$884

-$884

-$884

-$884

-$884

-$884

-$884

-$884

-$884

-$884

-$10,612

Rent for Portable Sign

-$125

-$125

-$125

 

 

 

 

 

 

 

 

 

-$375

Promotional Items

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$600

Business Cards

-$21

-$21

-$21

-$21

-$21

-$21

-$21

-$21

-$21

-$21

-$21

-$21

-$250

Salary to Biff

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$36,800

Salary to Mary

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$23,200

Travelling Expenses

$667

$667

$667

$667

$667

$667

$667

$667

$667

$667

$667

$667

-$8,000

Incorporation Tax

-$125

-$125

-$125

-$125

-$125

-$125

-$125

-$125

-$125

-$125

-$125

-$125

-$1,500

Accountant Fees

 

 

 

 

 

 

 

 

 

 

 

-$1,500

-$1,500

Heat & Hydro Expenses

-$615

-$615

-$615

-$615

-$615

-$615

-$615

-$615

-$615

-$615

-$615

-$615

-$7,375

Lease Expenses for Photocopier

-$150

-$150

-$150

-$150

-$150

-$150

-$150

-$150

-$150

-$150

-$150

-$150

-$1,800

Office Supplies Expenses

-$350

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$900

Telephone Cost

-$185

-$185

-$185

-$185

-$185

-$185

-$185

-$185

-$185

-$185

-$185

-$185

-$2,220

Total Operating Expesnse

-$6,838

-$6,538

-$6,538

-$6,413

-$6,413

-$6,413

-$6,413

-$6,413

-$6,413

-$6,413

-$6,413

-$7,913

-$95,132

NET OPERATING PROFIT

$24,962

$27,122

$932

$1,397

-$5,453

-$2,363

-$7,573

-$5,043

-$803

$2,977

$9,077

$15,487

$60,718

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expenses

-$149

-$149

-$149

-$149

-$149

-$149

-$149

-$149

-$149

-$149

-$149

-$149

-$1,788

NET PROFIT BEFORE TAX

$24,813

$26,973

$783

$1,248

-$5,602

-$2,512

-$7,722

-$5,192

-$952

$2,828

$8,928

$15,338

$58,930

A statement of Assets Needed: Equity and Debt Concerns

STATEMENT OF START-UP COSTS:

Particulars

Amount

Amount

Upgradation of Rental Property:

 

 

Ceiling

$3,600

 

Flooring

$2,800

 

Painting

$1,200

 

Lighting

$2,700

 

Total Upgradation Cost

 

$10,300

Advertisement & Promotional Cost:

 

 

Sign at the mall front

$2,000

 

Sign above store front

$900

 

In-Store Display Sign

$400

 

Advance Rent for Portable Signage

$375

 

Small Promotional Items

$600

 

Business Cards

$250

 

Grand Opening Cost

$1,000

 

Total Advertisement & Promotional Cost

 

$5,525

Opening Bank Balance

 

$5,000

Lease of Photocopier

 

$1,800

Purchase of Office Supplies

 

$300

Installation of Telephone

 

$190

TOTAL START UP-COST

 

$23,115

 

 

 

Loan from New Ventures

 

$15,000

Owner's Contribution

 

$8,115

TOTAL CAPITAL

 

$23,115

One-year Cash Flow Statement

CASH FLOW STATEMENT

Particulars

May

June

July

August

September

October

November

December

January

February

March

April

May

TOTAL

Cash Flow from Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receipts from Customers

 

$16,800

$89,440

$95,520

$49,280

$18,400

$0

$10,800

$5,200

$19,600

$18,480

$35,280

$61,920

$420,720

Payment to Suppliers

 

-$55,900

-$67,700

-$24,050

-$20,750

-$4,500

-$6,750

$0

-$3,250

-$12,250

-$18,550

-$30,650

-$47,700

-$292,050

Installation Charges paid

 

-$1,200

-$4,800

-$4,800

-$3,200

-$1,200

$0

-$800

-$400

-$1,200

-$1,200

-$2,000

-$3,600

-$24,400

Shipping Cost Paid

 

-$540

-$2,160

-$2,160

-$1,440

-$540

$0

-$360

-$180

-$540

-$540

-$900

-$1,620

-$10,980

Store Rent Paid

 

-$884

-$884

-$884

-$884

-$884

-$884

-$884

-$884

-$884

-$884

-$884

-$884

-$10,612

Advance Rent for Portable Signage

-$375

 

 

 

 

 

 

 

 

 

 

 

 

-$375

Small Promotional Items

-$600

 

 

 

 

 

 

 

 

 

 

 

 

-$600

Business Cards

-$250

 

 

 

 

 

 

 

 

 

 

 

 

-$250

Grand Opening Cost

-$1,000

 

 

 

 

 

 

 

 

 

 

 

 

-$1,000

Lease of Photocopier

-$1,800

 

 

 

 

 

 

 

 

 

 

 

 

-$1,800

Purchase of Office Supplies

-$300

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$50

-$900

Telephone Expenses

-$190

-$185

-$185

-$185

-$185

-$185

-$185

-$185

-$185

-$185

-$185

-$185

-$185

-$2,410

Salary to Biff

 

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$3,067

-$36,800

Salary to Mary

 

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$1,933

-$23,200

Travelling Expenses

 

-$667

-$667

-$667

-$667

-$667

-$667

-$667

-$667

-$667

-$667

-$667

-$667

-$8,000

Incorporation Tax

 

 

 

 

 

 

 

 

 

 

 

 

-$1,500

-$1,500

Accountant Fees

 

 

 

 

 

 

 

 

 

 

 

 

-$1,500

-$1,500

Heat & Hydro Expenses

 

-$615

-$615

-$615

-$615

-$615

-$615

-$615

-$615

-$615

-$615

-$615

-$615

-$7,375

NET CASH FLOW FROM OPERATING ACTIVITIES

-$4,515

-$48,241

$7,379

$57,109

$16,489

$4,759

-$14,151

$2,239

-$6,031

-$1,791

-$9,211

-$5,671

-$1,401

-$3,032

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow from Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

$0

Upgradation Cost

-$10,300

 

 

 

 

 

 

 

 

 

 

 

 

-$10,300

Sign at the mall front

-$2,000

 

 

 

 

 

 

 

 

 

 

 

 

-$2,000

Sign above store front

-$900

 

 

 

 

 

 

 

 

 

 

 

 

-$900

In-Store Display Sign

-$400

 

 

 

 

 

 

 

 

 

 

 

 

-$400

NET CASH FLOW FROM INVESTING ACTIVITIES

-$13,600

0

0

0

0

0

0

0

0

0

0

0

0

-$13,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow from Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan from New Ventures

$15,000

 

 

 

 

 

 

 

 

 

 

 

 

$15,000

Owner's Contribution

$8,115

 

 

 

 

 

 

 

 

 

 

 

 

$8,115

Repayment of Loan inclg. Interest

 

-$310

-$310

-$310

-$310

-$310

-$310

-$310

-$310

-$310

-$310

-$310

-$310

-$3,720

NET CASH FLOW FROM INVESTING ACTIVITIES

$23,115

-$310

-$310

-$310

-$310

-$310

-$310

-$310

-$310

-$310

-$310

-$310

-$310

$19,395

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCREASE/(DECREASE) IN CASH BALANCE

$5,000

-$48,551

$7,069

$56,799

$16,179

$4,449

-$14,461

$1,929

-$6,341

-$2,101

-$9,521

-$5,981

-$1,711

$2,763

Add: Opening Balance

$0

$5,000

-$43,551

-$36,481

$20,318

$36,498

$40,947

$26,486

$28,416

$22,075

$19,974

$10,454

$4,473

$0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Closing Balance

$5,000

-$43,551

-$36,481

$20,318

$36,498

$40,947

$26,486

$28,416

$22,075

$19,974

$10,454

$4,473

$2,763

$2,763

A statement of the Financial Commitment on the part of the principals

STATEMENT OF FINANCIAL COMMITMENTS FOR PRINCIPALS:

Particulars

May

June

July

August

September

October

November

December

January

February

March

April

May

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Opening Loan Balance

$15,000

$15,000

$14,839

$14,678

$14,517

$14,356

$14,195

$14,034

$13,873

$13,712

$13,551

$13,390

$13,229

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Repayments

 

$310

$310

$310

$310

$310

$310

$310

$310

$310

$310

$310

$310

Less: Interest

 

$149

$149

$149

$149

$149

$149

$149

$149

$149

$149

$149

$149

Principal Repayment

 

$161

$161

$161

$161

$161

$161

$161

$161

$161

$161

$161

$161

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Closing Loan Balance

$15,000

$14,839

$14,678

$14,517

$14,356

$14,195

$14,034

$13,873

$13,712

$13,551

$13,390

$13,229

$13,068

Conclusion

The main depictions about the break-even point has stated that the estimated amount for the company in reaching the point of contribution margin is depicted to be very high. This is evident with an amount of $3,23,839. This also signifies that the company needs to achieve a very high sales volume to enter the region of no profit or no loss. The net profit before tax has been further identified to be considerably fluctuating in nature This trend has been identified with NPBT of $24,813 in the month of June, $26,973 in July, $783 in August, $1,248 in May and -$5,602 June. The company consecutively earned loss from October to February and again depicted with a profit of $2,828 in the month of March $8,928, in April and $15,338 in May. The market analysis has further revealed that the increasing nature of the units sold for the long-range oak over the month as per the sales budget is considered as the main strength of the company. In addition to this, the decreasing nature of the average purchase as per the data of the sales budget is also conducive in minimising the cost. However, decreasing trend of the total sales for the products such as Long-Range Oak, and high range Oak is identified as the major weakness for the company. The purchase budget the total sales of low range Oak has reduced considerably and gross profit has been discerned with a fluctuating trend and in most of the months within the year it is seen to be decreasing in nature. It has been also discerned that as per the statement of financial commitments for principals the closing loan balanced has improved in the month of March, April and May.

Based on the depictions it is recommended that the company should consider improving on the current financial and marketing setup before entering the market. This rationale is evident as per the findings of the break-even analysis, income statement and sales budget.

References

Evans, V., 2015. The FT Essential Guide to Writing a Business Plan: How to win backing to start up or grow your business. Pearson UK.

Finkler, S.A., Smith, D.L., Calabrese, T.D. and Purtell, R.M., 2016. Financial management for public, health, and not-for-profit organizations. CQ Press.

Heizer, J., 2016. Operations Management, 11/e. Pearson Education India.

Kaiser, M.G., El Arbi, F. and Ahlemann, F., 2015. Successful project portfolio management beyond project selection techniques: Understanding the role of structural alignment. International Journal of Project Management, 33(1), pp.126-139.

McNeil, A.J., Frey, R. and Embrechts, P., 2015. Quantitative risk management: Concepts, techniques and tools. Princeton university press.

McPherson, R.A. and Pincus, M.R., 2017. Henry's Clinical Diagnosis and Management by Laboratory Methods E-Book. Elsevier Health Sciences.

Policy, I.C., 2016. FY 2016 Japan Fair Trade Commission Performance Evaluation Report (Standard Format). Policy.

Renz, D.O. and Herman, R.D. eds., 2016. The Jossey-Bass handbook of nonprofit leadership and management. John Wiley & Sons.

Titman, S., Keown, A.J. and Martin, J.D., 2017. Financial management: Principles and applications. Pearson.

Zietlow, J., Hankin, J.A., Seidner, A. and O'Brien, T., 2018. Financial management for nonprofit organizations: Policies and practices. John Wiley & Sons.

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