cash flow forecasting Flashcards
1
Q
what is meant by cash flow?
A
timing of receipts and payments .
looking to see if there is a surplus at any point
2
Q
what is meant by cash flow forecasting?
A
plan that shows how much money a business expects to receive in and pay out in given period
3
Q
impact of cash flow forecast
A
can see possible outcomes for business
can predict finance
4
Q
causes of problems
A
over investment customers having too much credit too much stock over trading unexpected changes
5
Q
ways to improve
A
just in time
rent assets
reduce trade credit
reduce stock
6
Q
advantages and disadvantages
A
+clear idea of how business performing
+see where they need to increase and decrease spending
- can’t predict exogenous factors
-little trade history makes hard to predict
