Business notes


Cash Flow

  • A Forecast is a prediction of what may happen in the future
  • A cash Flow Forecast is therefore a prediction of the inflows and outflows of cash in the future
  • Businesses use past figures and experiences to predict forecasts
  • A Cash Flow statement differs from a forecast. It detailed what has happened in the business, i.e. the money that has flowed in and out of the business

Cash flow versus Profit

  • Cash flow is most important in the short term as it is the businesses ability to pay their bills
  • Profit is more important in the long term
  • Businesses can be profitable and still experience cash flow problems

Creating a cash flow forecast

In order to


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