PREPARE YOUR WORD FILE REPORT BY ANSWERING THE THE 6 QUESTIONS BELOW (5 POINTS)

Question

PREPARE YOUR WORD FILE REPORT BY ANSWERING THE THE 6 QUESTIONS BELOW (5 POINTS) 1. What is your venture? (in a few words). ---Now assume you have launched your business (have suppliers & customers) 2. Does your business venture require the use of cash? Explain. 3. List two specific actions you will take to improve your accounts payables situation. 4. List two specific actions you will take to improve your accounts receivables situation. 5. What option would you select to manage company books? 6. Identify fixed costs for your business venture.

Explanation / Answer

Q1: What is your venture?

Solution: I am planning to start a Handbags with unique designs and colors and women between the age of 20 years to 45 years are the potential customers.

Q2: Does your business venture require the use of cash?

Solution: Yes, Generally the Manufacturing handbag business requires a good amount of cash and liquidity. Still, the requirement of cash can be reduced by many ways like in case of a material acquisition. The good and intimate relationship with suppliers can provide larger credit period for payment i.e. less requirement of liquidity and mode of cash payment for the customers can be replaced by digital means. In crux, with the above measures, the cash inflows can be increased in proportion to cash outflows on the basis of the time element.

Q3 &Q 4. List two specific actions you will take to improve your accounts payables situation?

Action 1: By framing an aggressive credit policy i.e. Giving goods on credit after the proper screening of creditability and validity of the customers.

Action 2: By offering effective trade and cash discounts on the basis of purchased quantity as well as advance payments.

Q5: What option would you select to manage company books?

Solution: Still the finance part of the business is the most critical part. Investment in good accounting professional for accounting and auditing, accounting software as well as designing of effective check and control system is the key to success.

Q6. Identify fixed costs for your business venture.

Solution: In case of manufacturing of handbags, the fixed cost includes rental cost of the factory, salary to manufacturing manager, rent, and insurance expenses are the best examples of fixed cost.

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