Unit 3.7 Flashcards

1
Q

Go to haiku to practice cash flow forecast

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is the difference between cashflow and profit?

A

Profit is defined as revenue less expenses. It may also be referred to as net income.

Cash flow, on the other hand, refers to the inflows and outflows of cash for a particular business.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the working capital cycle

A

There is a period of time from buying inputs to receive cash for sale

Working capital is how much is needed in this time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Cash flow forecast

A

Example: (Monday)

Opening balance 100

Cash inflow

Debt 50

Sell phone 100

Total cash inflow 150

Cash outflow

Shopping 80

Cinema 20

Present 100

Total cash outflow 200

Net cash flow -50 (150 - 200)

Closing Balance 50 (-50 + (100) opening balance)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Strategies for improving cashflows

A

Improving cash inflows

  • Improve credit terms
  • Increase cash sales

Reducing Cash Outflows

  • Delay payments to creditors
  • Delay spending on capital equipment
  • Rent/lease rather than buy
  • Cut unnecessary overheads
  • Don’t pay staff
How well did you know this?
1
Not at all
2
3
4
5
Perfectly