Cah Flow Forecast Flashcards
1
Q
Benefit of cash flow forecast
A
Identify problems in advance to secure other finance
2
Q
Disadvantage of cash flow forecast
A
Assumes all products are sold
Could be external factors (eg brexit)
3
Q
3 steps to answer
A
Knowledge
Application (case study)
Explanation
4
Q
Cash flow forecast definition
A
Estimate of amount of income and expenditure
5
Q
What does positive net cash flow mean
A
Flow of money in to bank account is greater than flow out
6
Q
How can a forecasted problem be prevented?
A
Increase income (loan) Reduce expenditure (negotiate) Trade credit (ask for delayed payment)
7
Q
What will a constant negative cash flow mean?
A
Go out of business as you cannot afford expenses
