Unit 3 - Cash flow and budgets

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  • Created by: sade
  • Created on: 30-12-13 18:06
define cash inflow
are money recieved by a business from sales, investments or loans
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define cash outflows
are money that leaves a business through paying for wages, materials, marketing, fixed assets etc
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define cash flow
is the money that enters and leaves a business as it makes and recieves payment
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define cash flow forecast
are detailed estimate of when and how cash is expected to flow into and out of a business
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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
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examples of cash outflows
purchases, wages, bills, rent, interest, capital expenditure, taxation
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define working capital
is the excess of current assets over current liabilities
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define over trading
when a firm is expanding too quickly and doesn't have the cash resources to cope with commitments
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define trade credit
is an arrangement in which suppliers allow customers a period of time to pay their bills
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how might a company try and cut cost
rent, distribution, repairs, utility bills, stationery, employees
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elements to help forecast sales
historical data, trend analysis, market research, experience and knowledge
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define favourable variance
occurs when the actual results are better than those anticipated and planned for in the budget
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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
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define a budget
is a financial plan for the future operations of the business. set targets to monitor performance and control operations
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Card 2

Front

define cash outflows

Back

are money that leaves a business through paying for wages, materials, marketing, fixed assets etc

Card 3

Front

define cash flow

Back

Preview of the front of card 3

Card 4

Front

define cash flow forecast

Back

Preview of the front of card 4

Card 5

Front

benefits of cash forecast

Back

Preview of the front of card 5
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