1.3.4 Cash and Cashflow

Question 1

Cashflow definition

Answer 1

Amount of money flowing in and out a business

Question 2

Net Cashflow formula

Answer 2

Cash inflows - Cash outflows

Question 3

Credit Terms

Answer 3

How long after a supplier lets you pay for products once it is ordered

Question 4

Insolvency

Answer 4

When a business does not have sufficient cash

Question 5

Opening balance

Answer 5

How much money a business starts the month with

Question 6

Closing Balance

Answer 6

How much money a business ends the month with

Question 7

Advantage of Cashflow Forecast

Answer 7

Allows a company to plan for the future

Question 8

Disadvantage of Cashflow forecast

Answer 8

Only a prediction

Question 9

How to negotiate out of cash flow problems

Answer 9

Negotiate an overdraft
Keeps costs under control
Keep cash coming into the business by negotiating sensible credit arrangements with suppliers and customers

Question 10

Cash

Answer 10

All money entering and leaving the business

Question 11

Cashflow forecast

Answer 11

Predicting the future flow of cash in and out the bank