Cash Flow Flashcards
1
Q
What is a Cash flow forecast?
A
Shows all the money coming in & going out of a bus
2
Q
What is cash flow?
A
The flow of all money into & out of a bus.
- Sell products = cash inflow
- Buy materials, pay wages, pay bills = cash outflow
3
Q
What is Net Cash flow?
A
The difference between Cash inflow & cash outflow over a period of time
4
Q
Why is cash flow important?
A
If there’s not enough £ flowing in, you don’t have enough £ to pay your bills!
5
Q
Why is a cash flow forecast handy?
A
- Helps firms anticipate problems:
- Helps predict when you might have a liquidity problem (lack of cash)
- Can try and sort with overdraft or other short-term financing
6
Q
Why does a cash flow forecast need to be watched carefully?
A
To monitor the impact of unexpected cash flows
7
Q
Look at the table on page 22, it will help
A
Table on page 22
