At the end of 3 months he estimates that he will have inventory, of unsold computers, which would have cost him \\( 10,000 \\) He estimates that wear and tear on the long-term assets of the business would amount to about \\( 2,000 \\) a year, so they would need replacing after about 5 years \\( (5 x \\) \\( 2,000= 10,000) \\) Now that he has been trading for 3 months, Bob has produced a budgetary control report and cashflow statement for the 3 months and a Statement of Financial Position for \\( 31^{\\text {st }} \\) March. These are shown below. He spent an extra \\( 1,000 \\) on advertising, which increased the volume of sales by \20. Bob would like to recover the \\( 20,000 \\) he lent to the company so he needs to consider how he might be able to replace the finance. He is reluctant to approach friends or relations. Softserve Ltd Budgetary Control Statement for the 3 months to 31 March 2022 Read the case study about Softserve Ltd., at the end of this question, and produce a report for Bob to help him convince others to invest in the business. This should include any actions he might take to improve the risks and rewards. Your answer must not exceed 1,500 words. Financial ratios must only be used for comparative purposes. You may wish to show any substantial calculations (such as the cash budget) in an Appendix. Also in an Appendix, please provide a summary of the recommendations you have made, showing the location (section number) of each. You are advised to include citations for any sources other than lecture materials. Please show in italics the material from cited sources. Your report should have a suitable title and contain the following sections: \\( 1 \\quad \\) Risks and rewards of the business: 1.1 Cost structure 1.2 Budgetary control report 1.3 Statement of Cashflows 1.4 Statement of Financial Position 1.5 Cassh budget for April May and June \\( 3 \\quad \\) Financing alternatives \\( 4 \\quad \\) References \\( \\quad \\) Appendices You are not required to provide an abstract, management summary or introduction. You should assume that, after March, sales volume continues to grow at about \10 each month. Case study: Softserve Ltd. When Bob is made redundant, he decides to run a business selling computers. In order to do this, he sets up a limited company, Softserve Limited. He plans to deposit \\( 1,000 \\) in the company's bank account on 1 January 2022 and issue 1,000 shares, with a nominal value of \\( 1 \\) each, in his own name. He also plans to lend the company \\( 20,000 \\) using his redundancy payment. Bob will rent premises for his business at \\( 2,300 \\) a month. He will pay \\( 10,000 \\) for tools and equipment. At the start, he will pay \\( 9,000 \\) for computers and components for resale. At the end of the first month, he will pay \\( 4,500 \\) for more computers and components. At the end of the second month, he will pay \\( 5,000 \\) for computers and components. At the end of the third month, he hopes to buy \\( 5,500 \\) of computers and components on credit, paying the following month At the outset, he will hire an assistant, at a cost of \\( 2,200 \\) a month, to work in the shop, whilst he does some work in the shop and all the administration. He will pay himself \\( 1,200 \\) a month in salary and plans to take further income as dividends. He estimates that he will use \\( 160 \\) worth of electricity per month, paid quarterly in arrears. At the beginning of January he will pay \\( \\) 1,440 for 12 months' insurance. Other expenses paid for during the period will be: He expects his first three months' sales to be as follows. At the end of 3 months he estimates that he will have inventory, of unsold computers, which would have cost him \\( 10,000 \\) He estimates that wear and tear on the long-term assets of the business would amount to about \\( 2,000 \\) a year, so they would need replacing after about 5 years \\( (5 x \\) \\( 2,000= 10,000) \\) Now that he has been trading for 3 months, Bob has produced a budgetary control report and cashflow statement for the 3 months and a Statement of Financial Position for \\( 31^{\\text {st }} \\) March. These are shown below. He spent an extra \\( 1,000 \\) on advertising, which increased the volume of sales by \20. Bob would like to recover the \\( 20,000 \\) he lent to the company so he needs to consider how he might be able to replace the finance. He is reluctant to approach friends or relations. Softserve Ltd Budgetary Control Statement for the 3 months to 31 March 2022 Read the case study about Softserve Ltd., at the end of this question, and produce a report for Bob to help him convince others to invest in the business. This should include any actions he might take to improve the risks and rewards. Your answer must not exceed 1,500 words. Financial ratios must only be used for comparative purposes. You may wish to show any substantial calculations (such as the cash budget) in an Appendix. Also in an Appendix, please provide a summary of the recommendations you have made, showing the location (section number) of each. You are advised to include citations for any sources other than lecture materials. Please show in italics the material from cited sources. Your report should have a suitable title and contain the following sections: \\( 1 \\quad \\) Risks and rewards of the business: 1.1 Cost structure 1.2 Budgetary control report 1.3 Statement of Cashflows 1.4 Statement of Financial Position 1.5 Cassh budget for April May and June \\( 3 \\quad \\) Financing alternatives \\( 4 \\quad \\) References \\( \\quad \\) Appendices You are not required to provide an abstract, management summary or introduction. You should assume that, after March, sales volume continues to grow at about \10 each month. Case study: Softserve Ltd. When Bob is made redundant, he decides to run a business selling computers. In order to do this, he sets up a limited company, Softserve Limited. He plans to deposit \\( 1,000 \\) in the company's bank account on 1 January 2022 and issue 1,000 shares, with a nominal value of \\( 1 \\) each, in his own name. He also plans to lend the company \\( 20,000 \\) using his redundancy payment. Bob will rent premises for his business at \\( 2,300 \\) a month. He will pay \\( 10,000 \\) for tools and equipment. At the start, he will pay \\( 9,000 \\) for computers and components for resale. At the end of the first month, he will pay \\( 4,500 \\) for more computers and components. At the end of the second month, he will pay \\( 5,000 \\) for computers and components. At the end of the third month, he hopes to buy \\( 5,500 \\) of computers and components on credit, paying the following month At the outset, he will hire an assistant, at a cost of \\( 2,200 \\) a month, to work in the shop, whilst he does some work in the shop and all the administration. He will pay himself \\( 1,200 \\) a month in salary and plans to take further income as dividends. He estimates that he will use \\( 160 \\) worth of electricity per month, paid quarterly in arrears. At the beginning of January he will pay \\( \\) 1,440 for 12 months' insurance. Other expenses paid for during the period will be: He expects his first three months' sales to be as follows