Cash Flow Forecasts
Teacher recommended
?- Created by: Cara MacSherry
- Created on: 05-11-13 21:38
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- Cash Flow Forecasts
- A cash flow forecast is a statement showing the expected cash IN and cash OUT each month for the next 6 to 12 months
- Advantages
- Manager should be better prepared
- Increased confidence of the banks
- Increased confidence of potential investors
- Lower interest payments as cash is borrowed for shorter period of time
- Total Payments is calculated by adding all the expected cash OUT
- E.g; Wages -Rent -Stock -Electricity
- Opening balance is the amount of cash at the start of the month
- Total Receipts is calculated by adding all the expected cash in e.g. from cash sales and credit sales
- Closing balance is the amount of cash at the end of the month, i.e. 'total receipts-total payments'
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