... not have any information on the cost of placing one order and the cost of storage, it is difficult to calculate the actual figure of the EOQ. I would suggest the management of Stoddard to reduce their credit terms to their debtors to one month and to purchase the equipment on credit and to be paid the following month. I would also suggest the management to reduce the stock purchasing from £1500 each month to £750. The freehold property cash payment should be spread over a twelve months period and this can avoid a large amount of cash being spent in the beginning of the financial year. On the following page, I have recalculated the cash budget with new amendments as I stated above, we can clearly see an improvement to the cash situation of Stoddard Ltd. Although the company is not making profit at present but it is more reliable to ...

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