Financial Analysis and Management

This assignment provides a comprehensive financial analysis of EasyFashion, focusing on managing cash flow problems. It discusses the importance of cash flow forecasting based on real data to make informed decisions for the business's future. The report also addresses issues related to inventory, accounts receivable, and operating cycle planning. Additionally, it emphasizes compliance with equality and diversity acts, including those regarding zero-hour contract employees and business assets.

BUSINESS STUDY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
Industry.......................................................................................................................................1
Location......................................................................................................................................1
Target Customers........................................................................................................................1
Business Model...........................................................................................................................2
Name of Business........................................................................................................................2
Visual Identity.............................................................................................................................2
Values of Business......................................................................................................................3
TASK 2............................................................................................................................................3
Primary research to conduct for business....................................................................................3
Secondary research to conduct for business................................................................................3
Qualitative and Quantitative research to conduct for business...................................................4
TASK 3............................................................................................................................................4
Ethical dilemma which faced in setting new business with proper justification........................4
TASK 4............................................................................................................................................5
Compliance with Equality and Diversity law for selecting zero hour contract employee..........5
Employment rights......................................................................................................................5
TASK 5............................................................................................................................................6
Describing business assets, liabilities, gains and expenses.........................................................6
Managing cash flow problems....................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The present report is stating business plan for EasyFashion with multiple strategies to be
adopted for accomplishing success along with best market research technique. In same series, it
will articulate about ethical dilemma and its solution and equality and diversity act for zero hour
contract. Lastly, it will categorise business assets, gains, liability and expenses.
TASK 1
Industry
The industry is developed with the business new fashion in clothing brand. Nowadays,
clothing across the world is considered as the most important aspect of human life. Industries
which deals in this business achieving higher profits. This clothing idea is generated because,
customers nowadays, are very much influencing with social media trend. They are attracted to
wear clothes which is in trend among the celebrities therefore, setting up of industry in clothing
wear is developed in business market.
Location
Choose right location of business is an important factor for achieving success. For
deciding location of business, right environment is carefully analysed. Location is decided in
favour of customers, so that they will easily able to reach at shop. To choose location, analysis is
done in main areas of city of London by which customers can easily get attracted. Location like
Zarkan of London is decided which is a clothing shopping centre so that customers will easily
accessible by car and by public transportation. To ensure proper safety of clients, brighting lights
are fitted in and outside the shop so that customers who are working will feel safe to reach shop
in night time as well.
Target Customers
Target group of customers will mainly be women's between the age of 18 to 50 and part
of middle class and upper class. Majorly they are targeted because, these is the group which
mostly like to purchase products and also women's have an incredible amount of buying power.
They are also targeted because, women's mostly spent countless working hours to choose what to
wear for a particular. Women's also targeted because they are easily get influenced regarding
their purchase decision and will also want to look best in all events and workplace they visit.
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Business Model
For earning profits in for newly established clothing business, revenue model is chosen. It
is the model which provides a framework for generating revenues in organisation. By
considering this model, owner will able to decide which source is to pursue in context of
generating revenues and profits in organisation. It is also analysed with this model, regarding
value which needs to offered to customers, offering price to goods and services and to develop
factors which overall generates profits and revenues. With clear revenue model, owner will able
to focus on target audience, fund development plan to offer products and services to raise overall
capital of business (Revenue business model, 2018).
Name of Business
“EasyFashion” clothing name is chosen for setting up business in market of London. This
name is selected because shop has effective clothing styles in accordance with preferable of
customers so that they will easily able to decide what to purchase or not. “EasyFashion” clothing
has effective employees which provides proper suggestion to customers with preferences of
selecting clothes. Tag line of this clothing business is “cloth which carry style”.
Visual Identity
“EasyFashion” clothing is a brand which provides quality of clothes with valuable
fabrics. Clothes which offered to customers are durable in nature with current market trend so
that customer will able to fulfil their expectation of wearing stylish clothes. Prices of products
and services are also cheap which is main concerns of customers regarding purchase of stylish
clothes with valuable quality. Logo which will be presented for operating business functions is as
follows-
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Values of Business
To operate functions of “EasyFashion” clothing in main areas of cities of London, factors
like social, environmental, equality and diversity will be effectively considered. This factors will
be considered to protect the environment of society in which business is located. Cloths products
will only be used which does not create an allergy to human body. Proper care will be considered
regarding products and services so that it protects both environment and human bodies. Valuable
fabrics will be offered to customers which prefer extra care on wearing quality of clothes. By
proper equality and diversity of law, proper safety and rules will be provided to employees so
that they work with encouragement for achieving goals of business. Discrimination will not be
developed at work culture to retain employee for long term basis.
TASK 2
Primary research to conduct for business
For establishing new business, proper primary research will be conducted in the main
areas of cities so that current market trend will get analysed. By visiting with in malls and
shopping centre of areas of UK, an idea will be generated regarding use of resources to carry
effective business operations. Opinions of customers will take by personally visit to them
through questionnaires or through face to face interview which helps in developing resources
which helps in satisfy customer needs. It will be used by conducting survey where opinions of
public will be obtained regarding their experience with other market competitors. A
questionnaire will be formed where permission will be asked from employees regarding its
completion so that resources which required to develop in order to improve business operations
will be purchased.
This primary research will be conducted for setting up new business because it helps in
developing factors which satisfy needs of customers and to develop resources by which revenue
will get generated.
Secondary research to conduct for business
To generate profit and to attract customer in newly business, secondary research is also
considered as important factor. This research will help in gathering information which is through
existing source proper resources will get developed. Through secondary research information
will be collected from outside world such as with agencies, industry, trade association, labour,
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media, customers etc. another factors by which resources will be obtain is from published
pamphlets, newsletters, trade publications, magazines and also with newspaper. In order to set up
effective business practises information will be generated through source of internet such as
through social media where needs to employee will directly communicated. By analysing
existing market research result, EasyFashion will also able to develop business operations which
competitors did not have.
This research will be conducted to achieve background view of market so that success of
already established services of clothing brands in main areas of cities will get analysed. It will
also help in analysing purchasing habit of customers.
Qualitative and Quantitative research to conduct for business
Qualitative research will be based on the opinions, attitudes, beliefs and intentions. This
research will help “EasyFashion” clothing to research for answers like why customers behave in
certain ways, or how they response for newly launched products and services in market. This
research technique will be used by entity through observation, one-on-one interview, by focusing
on particular group review so that business strategies will get develop to fulfil customer
expectation and by only that customer base will get developed.
Quantitative research is based on larger samples with proper statistics so that valid
research will conduct. This research provides information with statistical data so that strategies
will get developed regarding number of products and services which needs to produce, whom to
produce and where to produce. By collecting set of quantifiable data, EasyFashion will able to
assess customer's desire, able to perceive needs and opinion by which customer base will get
developed. Through this method, accurate analysis with mathematical figure will get obtained
which measured as most important aspect of setting up a new business.
These both research will help in uncovering customers real thoughts and feeling which
identify blockage of sales and services.
TASK 3
Ethical dilemma which faced in setting new business with proper justification
Case Overview
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Given case study is based on opportunity which offer to EasyFashion clothing industry
regarding its promotion on popular website. This promotion is considered as faithful until it is
not known by EasyFashion clothing that company which offering promotion is been accused of
treating its employee badly. Its employee complaint is regarding discrimination, bullying and
harassment by top management of company.
This case study is referred with the case study of BBC media, as its staff was bullied and
harassed with top authority especially women employees. After this accuse, its CEO was
terminated and new CEO Janet Smith and framed new multiple strategies for attaining brand
image and success. Due to this, people were afraid to work in this organization, where whistle-
blowing was challenge and was overhauled with respect to work review. Henceforth, no
individual or organization was in favour to associate with BBC because this will damage the
brand image and reputation and even staff will be demotivated (BBC to overhaul bullying, 2019).
The strong business ethics always initiates with top management and works its way down
at each level of operations. As per code of ethics for business is referred as foundation for
guiding principles, both value and legal oriented organization uses for keeping moral compass.
According to ethics, stakeholders must be given first priority and concerned for their well being
so in this aspect, EasyFashion should not grab the discount marketing opportunity to be
promoted through popular website because this will lead to bad brand reputation in its industry
(How to resolve ethical dilemmas, 2019).
TASK 4
Compliance with Equality and Diversity law for selecting zero hour contract employee
Equality of opportunity is replicated as very complex area and recruiters and employers
forms a defensive and legal compliance position. As equal opportunity signifies about treatment
of individuals with absence of judgements made of them on basis of stereotypes. There should be
offering of courteous, fair and equal opportunities to every individuals along with zero hour
employees. In the same series, principle should be full embraced those people as they will be
treated with fairness and working environment should be fostered and created where people with
experience and all background feel appreciated and valued. Diversity undertakes wide and very
positive outlook along with requirement to ensure about discrimination and stereotyping play in
process of selection and recruitment.
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The Equality Act 2010 provides protection to people for employment perspective through
victimisation, harassment, discrimination or any other detriment due to multiple characteristics
such as gender reassignment, pregnancy, disability, marriage or civil partnership, belief, race,
religion, sex and age.
Employment rights
The one employed under zero hour contract must be entitled for right of statutory
employment as with absence of exceptions. Apart from these, individual will gain benefit
through associated employment rights with context of its status with following rights such as:
 Statutory sick pay
 Protection against unfair dismissal
 Time off emergencies engaging dependants
 Statutory redundancy pay
 Right for requesting for flexible working
 Minimum notice period
 National minimum wage
 Protection for whistle-blowing
 Right for working no more than 48 hours on average per week
Equality and diversity are used for elaborating and champion about values of human
rights in society and it also includes workplace. Zero hour contracts might offer flexible from
full-time work to retirement and allows for top up about income. In this aspect, around 2.3% of
workforce of UK has presence of zero hour contract and increasing by year to year. It is closely
associated to low guaranteed hour contracts as they greatly fluctuated dependent in time of year
around Christmas and peaks in mid-summer. The zero hour contracts are applicable in multiple
big brands like JD Wetherspoon, Cineworld and Sports direct (Equality and diversity in
recruitment and selection, 2017).
However, it could be evaluated that in organization equality and diversity law will be
implied very strictly and absence of bias. In the similar aspect, there will be presence of
leadership for purpose of avoiding discrimination and monitored with top management as well.
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TASK 5
Describing business assets, liabilities, gains and expenses
Assets: These are the items which has presence of monetary value and owned through
business as it might be intangible or tangible. In simple words, it is resource which could be used
for current or future period for producing revenues. The assets of Easyfashion are cash, accounts
receivables, tools and equipments such as computers, land and building, inventory like clothes
and apparel.
Liabilities: It is elaborated as obligation which business has requirement to fulfil as in
short it is credit. The liabilities of EasyFashion are accounts payable to suppliers, short term
notes and borrowings.
Expenses: It is defined as outflow of assets or money to other company or individual as
payment for any service or item. The expenses of EasyFashion are rent, payroll burden and
expense, office supplies, utilities, telephone, insurance, depreciation, advertisement and
promotion cost.
Gains: It is increment in value of property or asset as it arises if price of selling or
disposition is more than its acquisition or original price. The gain for EasyFashion is increment
in price of land comparatively to book price.
Particulars Figures (in pounds)
cash outflow 20000
Sales revenue 15000
Other income 3000
Total 38000
Expenses
Rent 3000
Payroll expense 2300
Office supplies 1500
Utilities 4000
telephone 6000
Insurance 2685
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Depreciation 1500
Promotion and advertising 4000
Other expense 2450
Total expenses 27435
Cash inflow 10565
The issues of cash flow signifies that business spends higher money as it earns and it might be
due to fail for observing financial statements till they become too big for handling. Even any
organization creates margin could have negative cash flow due to lag time shipping out its
products when consumer pays along with posting date of its funds.
Managing cash flow problems
The cash flow must not meet immediate obligations like bill payments but it should be
capable for serving as cushion for multiple unforeseen financial circumstances. The diminishing
inventory could be outcome in required expense as prior to any monetary collection formed
because of sales increment. In the similar aspect, accounts receivable must be paid after purchase
of 30 days and when it comes to immediate cash flow, operating cycle should be planned form
day 1. It is replicated as process of cash flow through purchase time by gathering accounts
receivable and usually, it begins with inventory and cash on hand. It is very important for
analysing cash on constant aspect where cash flow forecast must be based on real data which
helps in undertaking for specific decisions for future of business (How to avoid cash flow
problem, 2019).
CONCLUSION
On basis of above report, it has been concluded that EasyFashion is capable for attaining
success by following specified strategy along with appropriate market research. Thus, it should
not grab discounting market opportunity because brand reputation will damage and staff will be
demotivated. Henceforth, Equality and diversity act must be complied with zero hour contract
employees and business assets, liability, expenses and gain are categorised at initial stage.
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REFERENCES
Online
BBC to overhaul bullying. 2019. [Online]. Available through
<https://www.bbc.co.uk/mediacentre/latestnews/2013/respect-at-work-review.html>.
Equality and diversity in recruitment and selection. 2017. [Online]. Available through
<http://www.bristol.ac.uk/hr/resourcing/additionalguidance/equality/>.
How to avoid cash flow problem. 2019. [Online]. Available through
<http://www.batescarter.com/how-to-avoid-cash-flow-problems>.
How to resolve ethical dilemmas. 2019. [Online]. Available through
<https://smallbusiness.chron.com/resolve-ethical-dilemmas-workplace-11008.html>.
Revenue business model. 2018. [Online]. Available through
<http://fortune.com/2016/09/21/business-revenue-models/>.
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