Cash Flow Flashcards
What is cash flow?
The amount of money coming in and out of the business over a period of time
Why is cashflow important?
- shows growth
- shows debts
What is a receipt?(sales)
Money coming into the business
What are payments?(stock)
Money going out of the business
What is the difference between cashflow forecast ad cashflow statement?
- Statements show previous cashflow
- forecasts predict future cashflow
What is a cashflow problem?
Where payments are larger than receipts and the business is in debt
How do you calculate net cash flow?
Receipts - payments
How do you calculate opening balance?
Opening balance = closing balance of previous month
How do you work out closing balance?
Opening balance + net cash flow
How do you solve cash flow problems?
- bank loan/overdrafts
- reduce payments
What is credit?
Money that a bank allows someone to use and pay back
What is quarterly?
Something issued four times a year
How can you analyse a cash flow forecast?
- work out net cash flow
- profits
- payments
