Business 0450 · IGCSE · Cash-flow forecasting and working capital
Cash-flow forecasting and working capital — practice question
Hashim is an entrepreneur. He intends to begin as a sole trader by setting up a small gift shop beside a well-known tourist attraction. His market research suggests that sales are most likely to be highest from October to June. His first business collapsed within 6 months of start up because financial planning was poor. This time, Hashim has prepared a cash-flow forecast, shown in Table 1, as part of his business plan. His parents have agreed to provide an interest free loan to cover the shop rent. He hopes to secure trade credit from suppliers.
(a)[2]
State two features of a sole trader business.
(b)[2]
Work out the values of:
X
Y
(c)[4]
State and explain two factors that Hashim’s suppliers may take into account before deciding whether to grant him trade credit.
(d)[6]
State and explain two ways in which a business plan could help Hashim’s new business to succeed.
(e)[6]
Do you think Hashim ought to start the new business? Support your view with evidence from Table 1.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Keeps all the profit” …