The Tristar Company

Income Statement for the Year Ended 30th April 2011

$ $ $ $
Sales 209
Less: Cost of Goods Sold
Opening Inventory 30,650
Add: Purchases 111,200
Less: Purchases Return -4750 106,450
Closing Inventory 28100 137,100
Cost of Goods Available -28100 109
Less: Closing Stock
Gross Profit 100

Less: Expenses
Heat and Light 3890
Salaries and Wages 42,100
General Expenses (16750 -4200) 16,750
Less: All Expenses -4200 12,550
Marketing Expenses 12,050
Rent 7500
Add: Outstanding 2500 10,000
Provision For Doubtful Debt 750
Depreciation:
Depreciation of M.V[0.2*(16000 -3200) 16,000 12,800 2560
Depreciation of Fixtures& Fittings (30000*0.1) 30,000 3000 86
Discount Received 5300 -5
Adjusted Expenses 81
Net Profit 18

Appropriation Account
Net Profit 18
Add Interest on Drawings
John 10,000 500
David 10,000 500
Sue 12,000 600 1
20

Less: Interest on Capital

John 40,000 1600
David 35,000 1400
Sue 25,000 1000
4
 16

Profit Appropriation
John 40 6
David 40 6
Sue 20 3

Current Account

John David Sue John David Sue

Balance b/d 1000 Balance b/d 2500 1500
Drawings 10000 10000 12000 Capital 10000
Interest on drawing 500 500 600 Interest on Capital 1600 1400 1000
Profit Shared 6600 6600 3300
Balance c/d 200 0 700 Balance c/d 0 1000 0
Total 10700 10500 14300 10700 10500 14300
Balance b/d 1000 Balance b/d 200 700

Tristar company balance sheet:

The Tristar Company

Statement of Financial Position on 30th April 2011
Amount Amount Amount
Non- Current Asset
Premises (cost) 44750
Motor Vehicle (cost) 16000
Less: Provision for Depreciation 3200
Less: Depreciation of Motor Vehicle 2560 10240
Fixtures and Fittings (cost) 30000
Less: Provision for Depreciation 17500
Less: Depreciation of Fixtures and
Fittings 3000 9500 64,490

Current Assets
Closing Inventory 28,100
Prepaid General Expenses 4200
Bank 7560
Trade Receivables (45000-2250) 42,750 82,610
Total Assets 147,100

Less: Short Term Liabilities

Rent 2500
Trade Payables 54,700 57200
Net Assets 89,900

Capital Financed By:

John 40,000
David 35,000
Sue (25000-10000) 15,000 90,000

Current Account
John 200
David 1,000
Sue 700 -100
89,900

Selected Ratios for Tristar Company

2009 2010 2011

Liquidity Ratios Current Ratio 1.78 1.94 1.44

Acid Test Ratio 1.32 1.25 0.95

Leverage Ratios Debt Ratio 0.54 0.35 0.39

Debt to Equity Ratio 0.87 0.85 0.64

Profitability Gross Margin Ratio 0.69 0.55 0.48

Return on Asset Ratio 0.52 0.59 0.13

Return on Equity 1.1 1.25 0.21

Asset Usage Inventory Turnover Ratio 4.5 4.2 3.71

Asset Turnover Ratio 2.23 2.65
 2.85
Receivables Turnover Ratio 6.5 5.8 4.9
Days Sales Outstanding
Ratio 60 Days 64 Days 75 Days

Selected Ratio for Marshall Company

2017 2018 2019
Liquidity Ratio Current Ratio 1.56 1.7 2.25
Acid Test Ratio 1.1 1.22 1.35

Leverage Ratio Debt Ratio 0.56 0.55 0.53

Debt to Equity Ratio 0.94 1.05 1.15

Profitability Gross Margin Ratio 0.23 0.32 0.51

Return on Asset Ratio 0.52 0.59 0.18
Return on Equity 1.1 1.25 0.38

Asset Usage Inventory Turnover Ratio 2.25 2.6 4.01

Asset Turnover Ratio 0.89 1.95 2.33
Receivable Turnover Ratio 0.25 0.16 5.28
56Day
Days Sales Outstanding Ratio s 62 Days 69 Days

CASH BUDGET:
 ABC CATERING SERVICES
Cash Buget (FY 2022)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Receipts: £ £ £ £ £ £ £ £ £ £ £ £
Sales Revenue 96,000 105,600 116,160 127,776 140,554 154609 170,070 187,077 205,785 226,364 248,001 272,801

Payments:
Purchases 28,800 31,680 34848 38333 42166 46383 50021 54023 58426 63269 68593 74452
Overheads 14,400 15,840 17424 19166 21083 23191 25510 28061 30867 33953 37349 41084
Salaries & Wages 16,000 16,000 16000 16000 16000 16000 16000 16000 16000 16000 16000 16000
Rent/Property Expsenses 12,000 10200 8670 7370 7370 6265 5329 4529 3848 3266 2769 2346
Marketing Expenes 9,600 10560 11616 12778 14056 15462 16988 18687 20556 22612 24874 27361
Equipment 6,000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000
Van Expenses 2,500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500
Total payments 89,300 93780 97058 100147 103070 105865 108548 111120 113614 116162 118787 121512
Net Cash Flow 6,700 11820 19102 27629 37484 48744 61522 75957 92171 110202 130214 151289
Opening Balance 8,000 156700 168520 187622 217206 258690 312234 377756 455713 546884 652086 772300
Closing Balance 14,700 168520 187622 217206 258690 312234 377756 455713 564884 652086 772300 923589

Marshall Company Balance Sheet:

Marshall Company
Statement of Financial Position on 31st March
2019
Amoun Amoun Amoun
t t t
Non-Current Asset
Premises (cost) 60000
Less: Provision for Depreciation 12000
Less: Depreciation of Premises 1200 46800
Motor Vehicle (cost) 20000
Less: Provision for Depreciation 15000
Less: Depreciation of Motor
Vehicle 1000 4000 50800

Current Assets
Closing Inventory 12600
Cash 270
Debtors (18500-370) 18130
Prepaid Insurance 450 31450
Total Assets
Less: Short Term Liabilities
Loan Interest Payables 2400
Electricity for lighting accrued 130
Bank Overdraft 1680
Creditors 9,750
less: Non-Current Liabilities
8% Bank Loan 30000
Net Assets 38290

Financed by
Capital 35000
Net Profit 14600
Less: Drawings 11310 38290

Marshall Company Income Statement:

Marshall Company
Income Statement for the Year Ended 31st March 2019
Amount Amount
Sales 95,800
Less: Cost of Goods Sold
Opening Inventory 10,780
Add: Purchases 48340
Return Outwards 960
Carriage Inwards (0.2*6500) 1,300
Closing Inventory 12600 46,860
Gross Profit 48940

Less: Expenses
Wages of Motor Vehicle Driver 11500
Carriage Outwards (0.8*6500) 5200
Depreciation of Motor Vehicle [0.2*(20000-15000) 1,000
Depreciation of Premises [0.02*60000) 1200
Rent and Insurance (7700-450) 7,250
Light and Heat (4950+130) 5,080
General and Marketing Expenses 6200
Loan Interest(0.08*30000) 2,400 39830
Add: Other Income
Discount Received 5300
Decrease in Provision for Doubtful Debts (560-(0.02*18500)] 190 5490
Net Profit 14,600
Scenario 1 CASH BUDGET:
ABC CATERING SERVICES
Cash Budget 2022
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Receipts: £ £ £ £ £ £ £ £ £ £ £ £
Sales Revenue 96,000 105,600 116,160 127,776 140,554 154,609 170,070 187,077 205,785 226,363 248,999 273,899

Payments:
Purchases 28,800 31,680 34,848 38,333 42,166 46,383 51,021 56,123 61,735 67,909 74,700 82,170
Overheads 14,400 15,840 17,424 19,166 21,083 23,191 25,510 28,062 30,868 33,954 37,350 41,085
Salaries & Wages 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000
Rent/Property Expsenses 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000
Marketing Expenes 9,600 10,560 11,616 12,778 14,055 15,461 17,007 18,708 20,578 22,636 24,900 27,390
Equipment 6,000 8,000
Van Expenses 2,500 2,625 2,756 2,894 3,039 3,191 3,350 3,518 3,694 3,878 4,072 4,276
Total payments 89,300 88,705 94,644 101,171 108,343 116,226 124,889 142,410 144,875 156,378 169,022 182,920
Net Cash Flow 6,700 16,895 21,516 26,605 32,210 38,383 45,181 44,667 60,909 69,985 79,977 90,979
Opening Balance 8,000 14,700 31,595 53,111 79,716 111,926 150,310 195,491 240,158 301,067 371,052 451,029
Closing Balance 14,700 31,595 53,111 79,716 111,926 150,310 195,491 240,158 301,067 371,052 451,029 542,008

Discounting Price by 20%, Which in Result Increase Sales by 10%

SCENARIO 2 CASH BUDGET:

ABC CATERING SERVICES
Cash Budget fy 2022
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Receipts: £ £ £ £ £ £ £ £ £ £ £ £
Sales Revenue 96,000 115,200 138,240 165,888 199,066 238,879 286,654 343,985 412,782 495,339 594,407 713,288

Payments:
Purchases 28,800 34,560 41,472 49,766 59,720 71,664 85,996 103,196 123,835 148,602 178,322 213,986
Overheads 14,400 17,280 20,736 24,883 29,860 35,832 42,998 51,598 61,917 74,301 89,161 106,993
Salaries & Wages 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000
Rent/Property Expsenses 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000
Marketing Expenes 9,600 10,560 11,616 12,778 14,055 15,461 17,007 18,708 20,578 22,636 24,900 27,390
Equipment 6,000 8,000
Van Expenses 2,500 2,625 2,756 2,894 3,039 3,191 3,350 3,518 3,694 3,878 4,072 4,276
Total payments 89,300 93,025 104,580 118,321 134,674 154,147 177,352 213,019 238,024 277,417 324,455 380,645
Net Cash Flow 6,700 22,175 33,660 47,567 64,392 84,732 109,303 130,967 174,758 217,922 269,952 332,643
Opening Balance 8,000 14,700 36,875 70,535 118,101 182,493 267,225 376,528 507,494 682,253 900,174 1,170,126
Closing Balance 14,700 36,875 70,535 118,101 182,493 267,225 376,528 507,494 682,253 900,174 1,170,126 1,502,769

Increasing Marketing Budget by 10%, Which in result increases Sales by 20%

SCENARIO 3 CASH BUDGET:

 ABC CATERING SERVICES
Cash Buget (FY 2022)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Receipts: £ £ £ £ £ £ £ £ £ £ £ £
Sales Revenue 96,000 100,800 105,840 111,132 116,689 122,523 128,649 135,082 141,836 148,928 156,374 164,193

Payments:
Purchases - 28,800 30,240 31,752 33,340 35,007 36,757 38,595 40,524 42,551 44,678 46,912
Overheads 14,400 15,120 15,876 16,670 17,503 18,378 19,297 20,262 21,275 22,339 23,456 24,629
Salaries & Wages 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000
Rent/Property Expsenses 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000
Marketing Expenes 9,600 10,080 10,584 11,113 11,669 12,252 12,865 13,508 14,184 14,893 15,637 16,419
Equipment 6,000 8,000
Van Expenses 2,500 2,625 2,756 2,894 3,039 3,191 3,350 3,518 3,694 3,878 4,072 4,276
Total payments 60,500 84,625 87,456 90,429 93,551 96,828 100,269 111,883 107,677 111,661 115,844 120,236
Net Cash Flow 35,500 16,175 18,384 20,703 23,138 25,695 28,380 23,199 34,159 37,267 40,530 43,956
Opening Balance 8,000 43,500 59,675 78,059 98,762 121,900 147,595 175,974 199,173 233,332 270,598 311,128
Closing Balance 43,500 59,675 78,059 98,762 121,900 147,595 175,974 199,173 233,332 270,598 311,128 355,085
Providing One Month Credit to Supplier

SCENARIO 4 CASH BUDGET:

ABC CATERING SERVICES
Cash Budget FY 2022
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Receipts: £ £ £ £ £ £ £ £ £ £ £ £
Sales Revenue 96,000 100,800 105,840 111,132 116,689 122,523 128,649 135,082 141,836 148,928 156,374 164,193

Payments:
Purchases 28,800 30,240 31,752 33,340 35,007 36,757 38,595 40,524 42,551 44,678 46,912 49,258
Overheads 14,400 15,120 15,876 16,670 17,503 18,378 19,297 20,262 21,275 22,339 23,456 24,629
Salaries & Wages 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000
Rent/Property Expsenses 12,000 10,200 8,670 7,370 6,264 5,324 4,526 3,847 3,270 2,779 2,362 2,008
Marketing Expenes 9,600 10,080 10,584 11,113 11,669 12,252 12,865 13,508 14,184 14,893 15,637 16,419
Equipment 6,000 8,000
Van Expenses 2,500 2,625 2,756 2,894 3,039 3,191 3,350 3,518 3,694 3,878 4,072 4,276
Total payments 89,300 84,265 85,638 87,387 89,481 91,902 94,633 105,660 100,973 104,567 108,440 112,590
Net Cash Flow 6,700 16,535 20,202 23,745 27,207 30,621 34,016 29,422 40,862 44,360 47,934 51,603
Opening Balance 8,000 14,700 31,235 51,437 75,182 102,389 133,010 167,026 196,448 190,781 235,141 283,075
Closing Balance 14,700 31,235 51,437 75,182 102,389 133,010 167,026 196,448 237,310 235,141 283,075 334,678

Reducing Rental Cost by 15%

Scenario 5 cash budget need to paste first in word:
ABC CATERING SERVICES
Cash Budget 2022
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Receipts: £ £ £ £ £ £ £ £ £ £ £ £
Sales Revenue 96,000 100,800 105,840 111,132 116,689 122,523 128,649 135,082 141,836 148,928 156,374 164,193

Payments:
Purchases 28,800 30,240 31,752 33,340 35,007 36,757 38,595 40,524 42,551 44,678 46,912 49,258
Overheads 14,400 15,120 15,876 16,670 17,503 18,378 19,297 20,262 21,275 22,339 23,456 24,629
Salaries & Wages 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000
Rent/Property Expsenses 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000
Marketing Expenes 9,600 10,080 10,584 11,113 11,669 12,252 12,865 13,508 14,184 14,893 15,637 16,419
Equipment 6,000 8,000
Van Expenses 2,500 2,625 2,756 2,894 3,039 3,191 3,350 3,518 3,694 3,878 4,072 4,276
Total payments 89,300 86,065 88,968 92,017 95,217 98,578 102,107 113,813 109,703 113,788 118,078 122,582
Net Cash Flow 6,700 14,735 16,872 19,115 21,471 23,945 26,542 21,269 32,132 35,139 38,296 41,611
Opening Balance 8,000 14,700 29,435 46,307 65,422 86,893 110,838 137,380 158,649 190,781 225,920 264,216
Closing Balance 14,700 29,435 46,307 65,422 86,893 110,838 137,380 158,649 190,781 225,920 264,216 305,827

1. The cash budget for next 11 months will be based on following assumptions:
a) A constant growth of 5% per month is expected in sales revenue.
b) Expenses related to purchases and overheads are expected to remain 30% and 15% of sales per month revenue respectively.
c) No change in salaries & wages expense and rental and property expense is expected.
d) Marketing expenses per month are expected to remain around 10 per cent of sales revenue.
e) Additional equipment is expected to be purchased in August 2022 for £8,000
f) Van expenses are expected to grow at a constant rate of 5 % per month.