Business Statistics

Electrical Engineering Systems Company (ESSCO)

I have been provided ESSCO’s financial information for three of their divisions: the ‘Heavy Electrical Engineering Set, Switchgear and Transformer Division’, ‘Automotive Products Division’ and the ‘Electronics and Consumer Communication Products Division’. Using the date they have given me, I have created a single spreadsheet with three different sections – input, process and output – to produce a clear and efficient cash flow algorithm which will allow them to have a much more in-depth view of their consolidated cash flow situation for the coming months.

Using this data, it makes it very clear how net cash flow has coped over the last six months. In January, things were looking promising with an income of almost £450,000 and an expenditure of around £250,000. The cash flow was at a stable rate at around £170,000. From January onwards, however, income never reach the heights that were expected, and dropped to an all time low in February bringing in a total of £349,000. In March, Cash flow dropped significantly, creating worrying signs for ESSCO. This was mainly due to the massive increase in expenditure, which rose from around £150,000 in February to £300,000 in March. This was mainly due to money going out for the Capital Plant. Net cash flow also dropped to its all time low so far in March at about £100,000. However, things picked up through April and May for ESSCO, with expenditure dropping by around £100,000 and income increasing to a new high in May at £465,000. Unfortunately, the positives quickly changed to negatives as ESSCO’s expenditure rose to £399,750 in June, almost matching the Income which was £417,500. At this point, net cash flow was almost non-existent, at £17,750, things are looking grim for ESSCO on the cash flow front.

Critical Evaluation of Poor Design

It is very clear that the creator of the provided spreadsheet has not had a lot of previous experience with excel. The information provided...