D Flashcards
What are the six types of cash inflow?
Cash sales, Credit Sales, Loans, Capital Introduced, Sales of assets, Bank interest recieved,
What are cash sales?
Goods and services paid at the time in cash
What are credit sales?
Goods and services paid for following purchase
What are loans?
Money borrowed by the business from an external source
What is capital introduced?
Funds invested in the business by the owner or shareholder
What is sales of assets?
Money recieved from selling an asset
What is Bank interest recieved?
Businesses may store money in savings accounts on which the bank will pay interest
What are cash and credit purchases by a business?
Anything a business buys is an outflow whether it is for use by the business or for resale
What is purchase of assets?
Small and large expenditures of items from computer printers and phones to vehicles and expensive machines and buildings
What is VAT?
Value added tax charged on goods and services, a business must be registered for VAT if its sales go over the VAT threshold the business ads VAT onto the cost of its goods and services
What are the 9 types of cash outflow?
Cash and Credit sales, Purchase of assets, VAT, rent, rates, salaries, wages, and utilities
What are the ways to improve cash flow?
Reduce unnecessary expenses, sell debts to debt factor agency, get suppliers to offer extended credit, request an extension on bank overdraft, sset targets to avoid cash flow issues, encourage debtors to pay back quicker.
What’s the benefit of a cash forecast?
Helps a business predict when they might have cash flow problems and helps them plan and predict their financial needs so can get extended overdrafts or loan offers
What’s a limitation with a cash forecast?
Businesses can delay payments and this isn’t considered which increase net cash inflow.
What is the equation for total revenue?
Total Revnue= Quantity of goods sold * selling price per unit
