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 report should have a suitable title and contain the following sections:

1 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 Cash budget for April May and June

3 Financing alternatives

4 References

Appendices

Part 1

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.