Balance sheet for Dolores boutique Essay Example

be due to the impending summer season and people prioritizing saving for vacations and trips.

The month of October resulted in a closing balance of -£17915 for Dolores boutique, indicating no profits were made. To prevent negative cash flow, one solution could be to decrease purchases from £22500 to £18000. In contrast, November saw a significant increase in sales with £50400, likely due to the holiday season. However, the closing balance was still negative at -£32720 because of an oversupply of stock. To avoid negative cash flow in the future, expenses must be reduced by decreasing purchases from £36000 to £32000.

The highest sales ever for Dolores boutique were achieved in December, totaling to £60000. The reason for this increase in sales is the Christmas season, where customers are purchasing both presents and clothing items, attracted by the sales. Unfortunately, Dolores boutique experienced a loss that month due to spending £44000 on stock. Despite the high sales volume, it was not sufficient to generate a profit or positive balance. To prevent negative cash flow in the future, Dolores boutique could reduce its expenses by lowering the amount spent on stock. A reduction in stock expenditure to £35000 at month-end would assist in achieving a positive cash flow.

The business can be significantly impacted by potential hazards resulting from these modifications. For instance, if Dolores boutique decides to increase their rent prices, their tenants may choose to vacate the premises. Additionally, reducing employee wages could result in a decline in motivation, eventually leading to a high possibility of resignation.