Business chap 31 definition 0.0 / 5 ? BusinessForecasting and managing cash flowsASCIE Created by: ngaelsaCreated on: 28-03-17 14:09 Cash flow The sum of cash payments to the business (inflows) less the sum of cash payments by the business (outflow) 1 of 12 Cash-flow forecast Estimate of a firm's future cash inflows and outflows 2 of 12 Insolvent when the business cannot meet its short-term debts 3 of 12 Cash inflow Cash payment received by the business (trade receivable, receiving loans from bank) 4 of 12 Cash outflow Cash payment made by the business (to pay supplier, labor costs) 5 of 12 Net monthly cash-flow Estimate the difference between monthly cash inflow and outflow 6 of 12 Credit control Monitoring of debts to ensure that credit periods are not exceeded 7 of 12 Bad debt Unpaid customer's bill that are now very unlikely to be ever paid 8 of 12 Over trading Expanding a business rapidly without obtaining all of the necessary finance so that a cash-flow shortage develops 9 of 12 Creditors Suppliers who agreed to supply product on credit and have not been paid yet 10 of 12 Opening balance Cash held by the business at the start of the month 11 of 12 Closing balance Cash held by the business at the end of the month becomes next month's opening balance 12 of 12
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