Cash flow

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Cash flow is the amount of cash flowing into and out of the business over a period of time

Cash inflow = cash flowing into the business such as payments from debators, bank loans and captial invested

Cash outflows = cash flowing out of the business such as payments on loans, purchasing assets and wages.

Net cash flow= cash inflow-cash outflow

cash flow cycle = the regular pattern of cash inflow and outflow of a business

Cash coming in

  • Credit from suppliers and customers
  • cash from suppliers and customers
  • bank loan
  • bank overdraft
  • sales revenue
  • government grants
  • investors

Cash flowing out

  • rent
  • wages
  • electricity bills
  • bank loan
  • bank overdraft
  • suppliers t
  • taxes

cash is the immediate spending power- without enough cash bills cant be paid

delay between outflows of cash and inflows of cash

  • amount of cash at the beginning of the cycle
  • length of time to convert inputs into outputs
  • level of credit payments by customers
  • amount of…


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