Cash Flow Flashcards
1
Q
What is a cash flow forecast?
A
Businesses use cash flow forecasts to estimate their total cash inflows and their total cash outflows
2
Q
Cash flow problems
A
Businesses that are profitable but have cash-flow or liquidity problems can become bankrupt as they lack short-term cash to pay short-term debts.
3
Q
What is revenue budget?
A
Forecasts expected revenues for a business during a period.
4
Q
What is an expenditure budget?
A
Forecasts expected costs for a business during a period.
5
Q
Advantages of budgets
A
- Help a business achieve targets and objectives
- Help managers focus on cost control.
