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D1: Write a Letter to Sharma and Ryan Explaining What Actions Are Available and Justifying Why They Might Choose to Take These Actions

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Submitted By Emmasainsbury
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Pages 4
Tuesday14th January 14

Dear Sharma and Ryan,

My name is Emma Sainsbury and I work for a particular company that looks at new businesses financial information. If I find a problem with your financial information then I have to contact the company I also give advice what actions are available. I hope you agree with the problems that I suggest to you.

The first problem that I am particularly worried about is the advertisement in January the cash flow says that you are going to spend £660 at the start of January which there is no problem with. Then in February all the way to December you have charged £160. This suggests you are spending too much money and then you are reducing the amount of profit you get. You could spend more money on your machinery so you get the update machinery. The other way I could suggest is to not have advertising and waiting to see if any of customers notice there is a new business or you could go outside into the High Street and promote your business that way by going up to customers saying “do you know there is a new business in Hatters Lane”. This then will promote your business in a way that will cost you no money at all to do. I think that this technique will improve your cash flow hugely all this will require is effort and determination.

The second problem I have with your cash flow is that you cash purchases they go up every three months this could have an impact on the business as the cash keeps going up and you do not seem to be spending anything. So the problem is that you have lots of money in the cash flow and you are not spending it. You must have something to spend your money on; you must have stock to get. This is a problem as you have not got enough stock so your suppliers cannot order from you if you have not got the stock. I would suggest that you buy more stock so then you do not have so much money in your

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