Unit 3 - Cash flow and budgets 0.0 / 5 ? Applied BusinesscassASAQA Created by: sadeCreated on: 30-12-13 18:06 define cash inflow are money recieved by a business from sales, investments or loans 1 of 14 define cash outflows are money that leaves a business through paying for wages, materials, marketing, fixed assets etc 2 of 14 define cash flow is the money that enters and leaves a business as it makes and recieves payment 3 of 14 define cash flow forecast are detailed estimate of when and how cash is expected to flow into and out of a business 4 of 14 benefits of cash forecast ensuting when liquid assets are avaliable, identifying shortage of cash periods, highlighting when and where to invest, re-ensure lenders/investors 5 of 14 examples of cash outflows purchases, wages, bills, rent, interest, capital expenditure, taxation 6 of 14 define working capital is the excess of current assets over current liabilities 7 of 14 define over trading when a firm is expanding too quickly and doesn't have the cash resources to cope with commitments 8 of 14 define trade credit is an arrangement in which suppliers allow customers a period of time to pay their bills 9 of 14 how might a company try and cut cost rent, distribution, repairs, utility bills, stationery, employees 10 of 14 elements to help forecast sales historical data, trend analysis, market research, experience and knowledge 11 of 14 define favourable variance occurs when the actual results are better than those anticipated and planned for in the budget 12 of 14 define adverse variance analysis is one of the methods used to monitor company performance it is the comparision of what actually happened with what the business budgeted 13 of 14 define a budget is a financial plan for the future operations of the business. set targets to monitor performance and control operations 14 of 14
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