Cash flow forecast

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  • Created by: PenMoon
  • Created on: 14-10-21 17:58
Name 2 cash outflows.
-Cash purchases
-Credit purchases
-Purchase of asset
-Value add tax VTA bank - revenue interest paid
-Rent
-Rates
-Wages and salaries
-Utilities
1 of 5
Name 3 benefits to cash flow forecasts.
-Encourages planning for cash inflows and outflows.
-Enables cash flow to be monitored and corrective action taken if necessary.
-Can be used as part of a business plan to help raise finance.
-Identify in advance times of negative closing balance allows
2 of 5
Name 2 limitations to cash flow forecasts.
-Based on forecast and therefore may be inaccurate.
-Cannot plan for unexpected events such as a rise in the costs of raw materials.
-Time taken to produce a cash flow forecast could have been spent on other tasks
3 of 5
What is the formula for net cash flow?
Net flow = inflow - outflow
4 of 5
What is the formula for closing balance?
Closing balance = opening + inflow – outflow
5 of 5

Other cards in this set

Card 2

Front

Name 3 benefits to cash flow forecasts.

Back

-Encourages planning for cash inflows and outflows.
-Enables cash flow to be monitored and corrective action taken if necessary.
-Can be used as part of a business plan to help raise finance.
-Identify in advance times of negative closing balance allows

Card 3

Front

Name 2 limitations to cash flow forecasts.

Back

Preview of the front of card 3

Card 4

Front

What is the formula for net cash flow?

Back

Preview of the front of card 4

Card 5

Front

What is the formula for closing balance?

Back

Preview of the front of card 5

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