Cash Flow

Question 0

Cash flow is like blood flowing through the body because

Answer 0

You can never have “minus” amounts and therefore essential.

Question 1

Which word beginning with R means money coming in?

Answer 1

receipt

Question 2

Net cash flow =

Answer 2

Receipts minus payments

Question 3

If the cash flow forecast shows a small minus amount for a few days only, what should the business do?

Arrange an ……………………………………….?

Answer 3

Overdraft facility

Question 4

With trade credit on purchases, when do these purchases show on the cash flow forecast?

Answer 4

Probably one month later

Question 5

How do you know the opening balance of a cash flow balance?

It’s the same as ………..

Answer 5

The closing balance from the month before.

Question 6

Where can you find the “profit” on a cash flow forecast?

Answer 6

You can’t.

Question 7

So what’s the point of a cash flow forecast?

Answer 7

You can see in which months you will be low on cash, and when you will need to ask the bank for money.

Question 8

How can the banks help?

Answer 8

They can offer you a overdraft facility or a loan.

Question 9

How can buying things on credit help?

Answer 9

You can delay payments - which will help in difficult months.

Question 10

What is another term for the money “flowing” through the business?
Clue = WC

Answer 10

Working Capital

Question 11

Without going to the bank what might the business do to improve cash flow?

Answer 11

Try to reduce costs, ask suppliers for trade credit or shop around for cheaper supplies.