Cash Flow Flashcards
Define the phrase ‘cash flow’.
The flow of money coming in and going out of a business.
Define the phrase ‘cash flow forecast’.
The prediction of the following month’s cash flow.
Define the term ‘receipts’.
The money coming into the business, known as inflows.
Define the term ‘payments’.
The money going out of the business, known as outflows.
Define the phrase ‘net inflow’.
More money coming into the business than going out.
Define the phrase ‘net outflow’.
More money going out of the business than coming in.
Define the phrase ‘opening balance’.
The bank balance of the business at the start of each month, before any receipts or payments happen.
Define the phrase ‘closing balance’.
The bank balance of the business at the end of each month, after receipts or payments happen.
How is a closing balance calculated?
Opening balance + Net Inflow or - Net Outflow
Give examples of receipts.
Sales revenue
Bank loans
Rent from properties that the business owns
Money invested by the owners
Give examples of payments.
Wages
Advertising
Business rates
Stock/raw materials
Fuel for vehicles
Rent
Utilities
What will a net inflow do to an opening balance?
Increase it
What will a net outflow do to an opening balance?
Decrease it
How are minus numbers written in cash flow?
In brackets
