Cash Flow

Question 1

Why is cash flow important for employees ?

Answer 1

It helps you see what’s going on NOW, where the business is headed, and what your boss’s priorities is likely to be

Question 2

Examples of how an employee can effect the cash flow

Answer 2

• Accountants, Billing mistakes = customers don’t pay the
  right amount
• Engineers, Designers, and Production = making the
  wrong product means more inventory
• Plant Manager = can you wait to buy the new equipment?

Question 3

All businesses run on CASH. So think about cash like water in a vat. It comes in _______, some remains in the vat _______ and some of it goes out __________

Answer 3

Cash inflow
Cash on Hand
Cash Outflow

Question 4

What you want is more cash to stay in the Vat because your __________

Answer 4

inflow is greater than your outflow.

Question 5

What are the different types (or ways) cash comes into a company?

Answer 5

–Selling goods or services 
–Loans,
–Investors, 
–selling an asset (think of those items on the
Balance Sheet) 
–selling inventory 
–Sell your receivables

Question 6

A company that shows profit but doesn’t show cash flow is ?

Answer 6

Not good because there’s no cash to pay bills

Question 7

A company that shows cash flow but doesn’t show profit is ?

Answer 7

Not good you have money but soon will run out and wont be able to pay bills

Question 8

Accounts receivable is also known as the ?

Answer 8

Inflow in to the Vat

Question 9

Accounts payable is also known as the ?

Answer 9

Outflow from the Vat

Question 10

What are the three main categories for a cash flow statement ?

Answer 10

Operating Activities
Investing Activities
Financing Activities

Question 11

Cash from or used in Operating Activities is also known as?

Answer 11

operating cash flow

Question 12

Cash from or used in Investing activities is also known as?

Answer 12

Investments for the future

Question 13

Cash from or used in Financing Activities is also known as?

Answer 13

Cash Dependency on the Outside

Question 14

A person who looks at businesses with good cash flow is ?

Answer 14

Warren Buffet

Question 15

What are 3 things that drive Warren Buffets investment strategy?

Answer 15

Lt vs St
he understands the business
Cash Flow

Question 16

Rule 1 - When comparing 2 years of _______ If an asset increases the _________ decreases

Answer 16

Cash flow

Question 17

Rule 2 - When comparing 2 ears of cash flow if liability increases then cash flow ___________?

Answer 17

Increases

Question 18

Balance sheet rule - When an Asset increases it is ____________?

Answer 18

Subtracted

Question 19

Balance sheet rule - When an Asset decreases it is ____________?

Answer 19

Added

Question 20

Balance sheet rule - When a Liability increases it is ____________?

Answer 20

Added

Question 21

Balance sheet rule - When a Liability decreases it is ____________?

Answer 21

Subtracted

Question 22

To find the change in cash you add what 3 categories from the P&L?

Answer 22

Cash from Operations, Investments, Financing