26 Cash flow forecasting

Question 1

liquid

Answer 1

asset that is easily changed into cash

Question 2

overheads

Answer 2

money spent regularly on rent, insurance, electricity and other things that are needed to keep a business operating

Question 3

insolvent

Answer 3

inability to meet debts

Question 4

cash flow forecast

Answer 4

prediction of all expected receipts and expenses of a business over a future time period, which shows the expected cash balance at the end of each month

Question 5

cash inflow

Answer 5

flow of money into a business

Question 6

cash outlfow

Answer 6

flow of money out of a business

Question 7

drawings

Answer 7

money taken out of the business by the owner for personal use

Question 8

closing cash balance

Answer 8

amount of cash that the business expects to have at the ends of each month (takes into account the cash inflows and cash outflows)