Cash Flow Forecast Flashcards
Define cash flow statement?
To show what has happened in terms of income and expenditure over the past 6months/year
Define cash flow forecast?
It is a prediction of income and expenditure over the next 6months/year
Reasons for a cash flow forecast?
- helps identify shortfall
- identify surpluses
- helps plan for the future
Define receipts?
This will be and estimate of the predicted sales revenue for each month.
Formula for receipts?
Amount sold * selling price
Define payments?
This section will detail the payments that the firm expects to have to make during the year.
Define net cash flow?
This will show the difference between the total payments and the receipts
Define opening balance?
This shows the money that a firm has carried over from a previous month
Define closing balance?
This is the difference between the net cash flow figure and the opening balance