3.2 Cash Flow Forecast

Question 1

What is a cash flow forecast?

Answer 1

A financial tool that estimates the amount of cash a business expects to receive or spend over a specific period (usually a monthly basis)
It helps businesses to predict their cash position in the future, allowing them to plan for shortfalls

Question 2

Cash flow forecast?

Answer 2

The was in which money comes into the business from customers and goes out of the business to play suppliers

Question 3

What does positive cash flow mean?

Answer 3

More money coming into a business than going out

Question 4

What’s a negative cash flow?

Answer 4

When a business has more money leaving the business than coming in

Question 5

What’s the importance of cash flow?

Answer 5

To pay suppliers and employees
To prevent business failure

Question 6

What are inflows and examples?

Answer 6

Money reviewed from customers and other sources
eg. Sales of profit
Capital from the owners
Bank loaned
Grants

Question 7

What are outflows and examples?

Answer 7

Money being paid (sent out)
eg. Rent and rates
Payment to suppliers
Wages and salary
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