Cash Flow Forecasts

Question 1

Cash flow

Answer 1

Refers to the movement of money in and out of an organization

Question 2

Liquidity problem

Answer 2

Occurs where there is a lack of cash in the organization because its cash inflow is less than its cash outflow (negative cash flow)

Question 3

Opening balance

Answer 3

This is the previous month’s closing balance carried forward in a cash flow statement

Question 4

Closing balance

Answer 4

This is calculating by adding the net cash flow to the opening balance

Question 5

How to make a cash flow forecast?

Answer 5

It’s going to be months going along the top and inflow title, inflows, total inflows, outflow title, outflows, total outflows, net cash flow, opening balance, and closing balance on the side.