BUSINESS: UNIT 2: CH 32:CASH FLOW FORECASTING

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7 Terms

1
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KW cash flow

money flowing in and out of the business

2
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inflows examples

- cash sales

- credit sales

- loans

3
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outflows examples

- wages

- rent

- utilities

4
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KW cash flow forecasting

predicting / estimating future inflows and outflows of a business. usually 4-6 months in the future

5
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advantages + disadvantages of cash flow forecasting

+ helps get financial aid

+ avoid unexpected issues

+ make comparisons over time

- based on estimates

- external factors ignored

- time consuming

6
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net cash flow

total inflow- total outflow

7
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closing balance

opening balance + net cash flow

(closing balance is next months opening balance)