Cash-flow homework

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan

Sales

Total

Payments

Materials

Wages

Loan Repayment

Advertising

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales

Total

Payments

Materials

Wages

Loan Repayment

Advertising

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales

Total

Payments

Materials

Wages

Loan Repayment

Advertising

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200

Total

Payments

Materials

Wages

Loan Repayment

Advertising

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200

Total 700

Payments

Materials

Wages

Loan Repayment

Advertising

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200

Total 700

Payments

Materials

Wages

Loan Repayment

Advertising

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200

Total 700

Payments

Materials 100

Wages

Loan Repayment

Advertising

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200

Total 700

Payments

Materials

Wages

Loan Repayment

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200

Total 700

Payments

Materials

Wages

Loan Repayment

Advertising

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200

Total 700

Payments

Materials

Wages

Loan Repayment

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200

Total 700

Payments

Materials 100

Wages

Loan Repayment

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200

Total 700

Payments

Materials 100

Wages

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200

Total 700

Payments

Materials 100

Wages

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200 800

Total 700 800

Payments

Materials 100

Wages

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200 800

Total 700 800

Payments

Materials 100

Wages

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200 800 1000

Total 700 800 1000

Payments

Materials 100

Wages

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200 800 1000

Total 700 800 1000

Payments

Materials 100

Wages

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200 800 1000 1500 1500

Total 700 800 1000 1500 1500

Payments

Materials 100

Wages

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200 800 1000 1500 1500

Total 700 800 1000 1500 1500

Payments

Materials 100

Wages

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200 800 1000 1500 1500

Total 700 800 1000 1500 1500

Payments

Materials 100 400 500 750 750

Wages

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200 800 1000 1500 1500

Total 700 800 1000 1500 1500

Payments

Materials 100 400 500 750 750

Wages

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

His business will start with a bank loan of £500 in March. He predicts sales at first to be slow; he will only attract £200 of orders in March. Peter finds his material costs are half of whatever his sales are. E.g. his material costs in March are half of £200.Peter realises the power of advertising and so plans to place a series of adverts in the local News Guardian at a cost of £400 per month.His bank manager has calculated that he will have to pay £100 per month to pay off his loan. His sales pick up in April, rising to £800 and again to £1000 in May. June and July is the main pepper picking period, producing promising figures of £1500 in both months.He intends to employ his pepper picking partner Paula to help pick the peppers. He will only pay her £50 per pepper picking month.

March April May June July

Receipts

Bank Loan 500

Sales 200 800 1000 1500 1500

Total 700 800 1000 1500 1500

Payments

Materials 100 400 500 750 750

Wages 50 50 50 50 50

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

Now we add the total of Payments

March April May June July

Receipts

Bank Loan 500

Sales 200 800 1000 1500 1500

Total 700 800 1000 1500 1500

Payments

Materials 100 400 500 750 750

Wages 50 50 50 50 50

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total

Opening Balance

Closing Balance

Like this

March April May June July

Receipts

Bank Loan 500

Sales 200 800 1000 1500 1500

Total 700 800 1000 1500 1500

Payments

Materials 100 400 500 750 750

Wages 50 50 50 50 50

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total 650 950 1050 1300 1300

Opening Balance

Closing Balance

OK So what is wrong here?

What is missing?

Sorry what is missing from our (cough cough net) cash flow forecast

March April May June July

Receipts

Bank Loan 500

Sales 200 800 1000 1500 1500

Total 700 800 1000 1500 1500

Payments

Materials 100 400 500 750 750

Wages 50 50 50 50 50

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total 650 950 1050 1300 1300

Opening Balance

Closing Balance

We have 5 elements that make up cash flow statements / cash flow forecasts

1. Receipts / inflow / tap2. Payments / outflow / drain3. Net cash flow (Receipts - Payments)4. Opening balance5. Closing balance

March April May June July

Receipts

Bank Loan 500

Sales 200 800 1000 1500 1500

Total 700 800 1000 1500 1500

Payments

Materials 100 400 500 750 750

Wages 50 50 50 50 50

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total 650 950 1050 1300 1300

NET CASH FLOW

Opening Balance

Closing Balance

This months opening balance becomes next months????

March April May June July

Receipts

Bank Loan 500

Sales 200 800 1000 1500 1500

Total 700 800 1000 1500 1500

Payments

Materials 100 400 500 750 750

Wages 50 50 50 50 50

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total 650 950 1050 1300 1300

NET CASH FLOW 50 -150 -50 200 200

Opening Balance

Closing Balance 50

Closing balance!! Very good

March April May June July

Receipts

Bank Loan 500

Sales 200 800 1000 1500 1500

Total 700 800 1000 1500 1500

Payments

Materials 100 400 500 750 750

Wages 50 50 50 50 50

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total 650 950 1050 1300 1300

NET CASH FLOW 50 -150 -50 200 200

Opening Balance

Closing Balance 50

March April May June July

Receipts

Bank Loan 500

Sales 200 800 1000 1500 1500

Total 700 800 1000 1500 1500

Payments

Materials 100 400 500 750 750

Wages 50 50 50 50 50

Loan Repayment 100 100 100 100 100

Advertising 400 400 400 400 400

Total 650 950 1050 1300 1300

NET CASH FLOW 50 -150 -50 200 200

Opening Balance 50 -100 -150 50

Closing Balance 50 -100 -150 50 250

Ok After the holidays lessons will generally be better and more organised, whereby you will have notes to put in your shiny new folders you will have

OK I do have one thing to ask

• Can you please give me some teacher feedback on the piece of paper I have given you, let me know how I’m doing, if there is anything I need to be doing different, if I’m moving too quick, too slow, talking too quick etc…. Is there anything in other lessons that teachers do with you that you think would help you in business if I did etc… Please speak your mind here, help me to help you