Identify different types of capital and revenue expenditure

Complete tables on straight line and reduced balance depreciation

Use the formula to calculate BEA

Accept these or any other applicable answer

What are the profits they made during the past 2 years? What are the main changes they have made over those 2 years which would account for this.

Look at the trends which have impacted the business and what would have caused the profits to change over that time

Produce a Poster presentation that explains to advisors at your presentation the breakeven analysis for your business. 

What do I have to do?

You will need to produce a poster explaining the results of the breakeven analysis.

Part 1: Create a breakeven using given sets of data

Using the data from your small business create a poster presentation demonstrating the use of the breakeven.  You should produce two sets of breakeven data.  One set must show an optimistic view of your businesses sales levels and one must show a more pessimistic view of sales.

Part 2:  Present the breakeven using the appropriate annotated, accurate graph.

Using the data for your business, produce and present annotated breakeven graphs showing the accurate use of the breakeven analysis. The graphs must show clear annotations and supportive explanations for the key components of the breakeven such as costs, revenue, breakeven and margin of safety.

Part 3:  Explain how selected business can use the breakeven analysis in a given situation.

Using the breakeven analysis explain what the data is telling you about your business idea.  

Part 4: Assess the impact of changing costs and revenue data on the breakeven point for a selected business.

Following from Part 3, you should analyse the impact of your two sets of data on the  business and its breakeven point.  Highlight the differences between the performance of the business in both cases. 

Part 5: Evaluate the importance of the breakeven analysis to a selected business.

Finally, look at the business’s breakeven analysis, evaluate how the information from the breakeven can inform your business in making decisions and help achieve its objectives of maintaining profitability and continued success.

What do I have to do?

Part 1: Demonstrate the use of cash flow forecasting in business

Firstly, to understand cash flow forecast you must explain the purpose of the cash flow and what it tells you about your business.  Present this in a poster.

Using the data provided from your business, you must prepare an accurate cash flow forecasts for a 12-month period identifying and explaining fluctuations in income and expenditure.  Produce one cash flow for each of your two scenarios.

Part 2:  Explain the implications of regular and irregular cash inflows and outflows for your business.

Add to your poster explaining the implications of regular and irregular cash inflows and outflows for your business, for example is there enough money to pay suppliers in the future, or if additional stocks are needed for busy seasonal activity.

Part 3:  Analyse a cash flow forecast to identify issues and appropriate actions for your business.

Continuing from Part 2, you need to analyse the cash flow forecasts completed in Part 1 & 2.  Identify any issues in the cash flow forecast, these may be issues such as cash shortfalls, over staffing, excess spending or borrowing.   Justify and give appropriate courses of actions for your business to maintain its cash flow and avoid a surplus or a deficit.  Make sure you explain why the actions are important?  

Part 4:  Evaluate cash flow forecasting as a tool for managing the finances for a selected business.

Using the cash flow forecast in Part 1-3, you need to evaluate why cash flow forecasting is important for any business in managing its finances and how it can be used to inform decision making for the company.  For example, if the cash flow forecast identifies overspending on resources such as staffing then what would you recommend the business to do to avoid this over spend?  How & why would this be helpful in the future in their recruitment & employment of staff and its cash flow?