With this task Let me analysis the money flow challenges a business

Intruduction

In this assignment Let me explain tips on how to analyse the cash flow problems of TOBEY MAGUIRE such as the challenges they might exoerirence and producing references to KEN's cashflow forecast.

Reasons for cash flow problems

Overtrading:

Overtrading occurs when a organization accepts job and attempts to complete that, but discovers that it needs greater methods to finish it. Also, it is when the creation cycle is actually long. TOBEY MAGUIRE enterprise can be overtrading as they have used extra personnel in 06 and January which means they may be paying more income. The product sales and acquisitions are excellent but as a result of extra personnel they have to use more money, they spent another ВЈ3, 500 in 06 and another ВЈ3, 500 in January. This is overtrading as they are spending more money than needed. They could have exercised a better thought instead of employing more persons.

Credit rating policy:

This is when a company may give out too much credit rating to their consumers; they should make sure the collection process is efficient. KEN business have made a deal with buyers in which they need to receive their very own payments of sales fifty percent of product sales in one month in advance which means if the sale is ВЈ100, the customer will have to pay ВЈ50 in one month before and they have to pay 25% in the same month of sale as well as the remaining two months later. Inability to have credit insurance, especially when working with consumers internationally, may cause the business to reduce substantial cashflow if the customer is gradual to pay or fails. Failure to leverage these kinds of financing alternatives when your organization is producing or manufacturing a product or service for any client, might cause the business to suffer a short term cashflow problem.

Raising costs:

This is when a business has an increase in operating bills without managing control, this might cause cash issues. KEN have raising costs as they have been giving money...