unit 3 topic 15

Question 1

cash flow forecast

Answer 1

document that shows the predicted flow of cash in and out the business over period of time - usually 12 months - a healthy CF is crucial to business survival.

Question 2

inflows / reciepts

Answer 2

its the money going into a business which could be from sales, investing or finanvcing

Question 3

outflows/payments

Answer 3

money leaving the business - including employees salaries, maintainence of business premises and dividends that have to be paid to shareholders

Question 4

opening balance

Answer 4

amount of cash available in business at the start if set time period

Question 5

closing balance

Answer 5

amount if cash available in business at end of set time period

Question 6

credit period

Answer 6

length of time given to customers to pay for goods and services received

Question 7

liquidity

Answer 7

measures a firms ability to meet short term cash payments

Question 8

insolvent

Answer 8

when firm is unable to meet short term cash payments