Question

Describe what you think the seasonality scenario would be for one (1) year for any two (2) of the businesses listed below. Explain how cash flow would be affected over the course of said year.

Ski shop in a Mid-Atlantic state

Christmas tree farm

Candy store

Disney World

Fitness Center

Beachfront Resort in Florida

Answer 1

Christmas Tree Farm-

Seasonality - The Christmas Tree are of great demand during the month of December and experiences no demand throughout the other months. Therefore we see a seasonal spike in demand curve every December and almost zero demand in other months.

Cash Flow - The Spring is considered to be the best sowing season for the Christmas trees and hence, the fam management would be required to make investments in the period of January-March to sow new trees. In addition to this, there would to be sustained expenditures in the maintenance activities throughout the year. Plus, we would also require additional workforce during the harvest to cater to the demand spike. On the other hand, we shall experience a good cash inflow during the harvest/Christmas season.

Outflow -

• Seasonal investment in Sowing activities
• Seasonal investment in Harvest activities
• Uniform expenditure in maintenance activities.

Inflow - Seasonal Sale of Trees in Christmas season.

Disney World -

Seasonality- Disney world would experience enhanced customer inflow during the weekends over a period of time. Thus, we shall experience very low and almost uniform customer inflow during the weekends and a week basis seasonal spike in demand during the weekends. In addition to this, Disney world would also experience seasonal spikes during the Spring and Autumn academic breaks and also during the holidays (National & International).

Cash Flow - There would be sustained cash outflow for the maintenance and upkeep of the amenities. Moreover, they shall experience periodic cash outflows when there is a new installation undertaken in these venues. On the other hand, Disney World shall experience uniformly low cash inflows with a periodic seasonal spikes during the weekends and holidays.

Out Flow-

• Stable Outflows for Maintenance activities.
• Random outflows for new installations.

Inflows -

• Uniform Low inflows during weekdays.
• Seasonal weekly spikes of Inflow on Weekends.
• Seasonal yearly spikes of inflow on Spring & Autumn breaks and Holidays.

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