planning

Question 1

purpose of a business plan

Answer 1

to secure external funding
to ensure firms develops healthy financial structure
help identify problems

Question 2

define cash inflow

Answer 2

cash flows into the business

Question 3

list examples of cash inflow

Answer 3

cash sales
payment from debtors
sales of assets
bank loans

Question 4

define cash outflow

Answer 4

cash flows out of the business

Question 5

give examples of cash outflow

Answer 5

purchasing stock
paying wages
purchasing assets

Question 6

why is cash flow important to a business?

Answer 6

ensures a positive cash balance in order to be able to meet day to day expenses

Question 7

define a cash flow forecast

Answer 7

forward looking statement that tries to predict cash inflow and outflow in the future

Question 8

how do you work out net cash flow

Answer 8

inflow - outflow

Question 9

what’s an opening balance

Answer 9

previous months closing balance

Question 10

how to work out closing balance

Answer 10

opening balance + net cash flow