Budget Report Hamble Ltd.

BUDGET REPORT HAMBLE
LTD.

TABLE OF CONTENTS
PART- A..........................................................................................................................................1
1. Cash budget for the month of April to September...................................................................1
2. Analysis of the cash budget and the advise related to solving the cash flow problem............1
3. Sources of finance and its advantages and disadvantages:-.....................................................2
4. Advantages and disadvantages of the issue of shares as the source of finance.......................4
PART- B..........................................................................................................................................4
1. Calculation of the ratios...........................................................................................................4
2. Comparative analysis...............................................................................................................6
PART- C..........................................................................................................................................7
REFERENCES................................................................................................................................8

PART- A
1. Cash budget for the month of April to September
Mentioned in the appendices
2. Analysis of the cash budget and the advise related to solving the cash flow problem
The tight liquidity position of the company can be solved by the following:-
 The first major concern for the company is that the working capital management must be
ensured in an effective manner which builds the operational efficiency and also helps the
operating cycle to move smoothly in the business. This can be done by the managing the
receivables and the payables of the company, as the company is availing the credit period
of one month from its suppliers, on the contrary it is providing the credit period off two
months to the customers to whom the goods and services are sold.
 Apart from that the liquidity position of the company also gets affected by the fixed
financial liabilities that are posed on the profitability of the company. This is due to
incorporating the debt factor in the capital structure of the company, where not only the
interest liability is imposed but also the repayment that has to be done in the fixed
maturity of the instrument.
 If the company's cash and credit sales are compared then in that case it can be known that
the cash sales are very less in proportion as compared to the credit sales. This policy of
the company must be improved with the help of providing the discounts, offers and
effective marketing of the goods and services.
3. Sources of finance and its advantages and disadvantages:-
 Venture capital:- It is a form of the private equity financing where the venture capitalist
is one who has excess funds and shall be investing or financing the opportunities which
are having growth potential in the future. These investments are made in the stages
depending on the success of the business.
Advantages Disadvantages
 It does not pose any fixed liability for
the company.
 It dilutes the ownership and control of
the existing shareholders.
 Bank loan- They are the most common source of finance where the company gets the
fund in the form of loan that is sanctioned by the bank. This imposes a fixed liability of
1