Budget And Cash Flow Development - Hospitality

Internal Code: MAS6920

Hospitality

It’s like stock, employee expenses, rents and many more things. In addition, if a cash flow gives positive result then it can be a stage that the company is running smoothly. Negative cash flow gives a result that the magnet of the company is not running smoothly. For that purpose interim reports and monthly cash flows also needed. Comparing cash flow with its estimated budget gives an outcome how estimation was done and what actual financial activities are performing. Below the table is showing the cash flow of the month of July for them. This helps to understand how organised and planned activities are performing at the BD Corp Cafe. This will give an idea how similar or different it from a budget of that BD Corp Cafe. it will ensure that all expenses are paid or not and the difference from a budget of that payments. In addition, it helps to understand how much payments are made and how much is left.  

Part B As per their last management plans, they faced a huge loss for past several months. Again, to overcome this stage the owners wants to improve his strategies. As comparing its purchase of stock at first they do not check the availability of stocks. They do not check whether a stock is spoiling or not. As per the estimated budget, they make estimation that purchase will be around $6000. However, as per the cash flow, it shows around $15000. The estimation is wrong for the budget. As they purchase from a local market it cost is low to them but those items spoiled easily as their qualities are not so good. That's why they need to purchase more frequently. As per the cash flow, their total wages are around $11000. Again, as per the estimated budget, they have total wages around $6000. They need to give sufficient amount of wages to their workers. In addition, it helps encourage the works to do their work more energetic way. Their total expenses were estimated in the budget is around $20000. As per the cash flow of July, the total expense was around $33000. There is again a huge difference between an estimated budget and cash flow. This is because of their poor organisation plans and strategies. First of all, they need to track the availability of their stock each month. Therefore, it will restrict buying the stock again and again.

Part C It can be said that as per the fluctuation of market price and demand the budget is fluctuating. Again, the worker and the owners have no control over their expenses. In addition, as early mention, they use some spoiled and poor quality of their ingredient for making their products in a cafe. Because of that, the demand of customers is not so high. Therefore, the owners and employees need to be aware of the market trend and control their expenses. For that purpose, they need good financial plans and structures for their cafe.