cash flow statements and forecasts

Question 1

why does an enterprise collect cash flow data?

Answer 1

use it to produce actual cash flow statements and cash flow forecasts

Question 2

why does an enterprise use this information?

Answer 2

to monitor and control cash flow

Question 3

actual cash flow statements:
what does an actual cash flow statement record?

Answer 3

the enterprise’s actual cash inflows and outflows over the previous 12 months

Question 4

actual cash flow statements:
why does an enterprise use an actual cash flow statement?

Answer 4

to monitor the flow of cash.

Question 5

actual cash flow statements:
why may an analysis of the previous year’s cash flow statement be used?

Answer 5

to produce the enterprise’s cash flow forecast

Question 6

cash flow forecasts:
what does a cash flow forecast predict about the enterprise?

Answer 6

enterprise’s likely cash inflows from sales, and outflows (purchases) each month over a period of time

Question 7

cash flow forecasts:
what does the forecast allows the enterprise to calculate?

Answer 7

net cash flow

Question 8

cash flow forecasts:
what does this forecast allow the enterprise to ensure ?

Answer 8

it has sufficient cash to cover its running costs

Question 9

cash flow forecasts: what is it used to determine the requirements of?

Answer 9

net current asset requirements

Question 10

cash flow forecasts: what is it used to determine to operate the enterprise?

Answer 10

the working capital

Question 11

cash flow forecasts: what is it used to determine about the business?

Answer 11

the business decisions

Question 12

how do you calculate the net cash flow?

Answer 12

Cash inflows (receipts) - Cash outflows (payment) - Net cash flow

Question 13

how do you calculate the closing balance?

Answer 13

Net cash flow + Opening balance - Closing balance