13. Using Cash Flow Forecasting

Question 0

Liquidation

Answer 0

Turning assets into cash

Question 1

Cash flow.

Answer 1

Total cash payments into a business minus total cash payments

Question 2

Insolvent

Answer 2

When a business can’t meet its short term debts.

Question 3

Cash inflows.

Answer 3

Payments in cash received by a business.

Question 4

Cash outflows.

Answer 4

Payments in cash made by a business such as those made to suppliers and workers.

Question 5

Debtors

Answer 5

Customers who have bough products on credit and will pay cash at an agreed time in the future.

Question 6

Credit sales.

Answer 6

The value of goods sold to customers who do not pay cash immediately.

Question 7

Cash flow forecast.

Answer 7

An estimate of a firms future cash inflows and outflows.

Question 8

Net monthly cash flow.

Answer 8

The estimated difference between monthly cash inflows and outflows.

Question 9

Opening balance.

Answer 9

Cash held by the business at the start of the month.

Question 10

Closing balance.

Answer 10

Cash held at the end of the month.