2.1.4 Planning Flashcards
1
Q
What is a cash flow forecast?
A
A prediction of all expected incomings and expenses of the business.
2
Q
What is cash inflow?
A
The flow of money into the business.
3
Q
What is cash outflow?
A
The flow of money out of the business?
4
Q
What is net cash flow?
A
Cash inflow - Cash outflow
5
Q
Benefits of cash flow forecast?
A
Identifying timings of cash shortages and surplus.
Supporting application for finance.
Enhancing the planning process.
Monitoring cash flow.
6
Q
Limitations of cash flow forecast?
A
Prediction.
Cannot factor in external shocks.
