cash and cash flow
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10 Terms
why is cash so important to a business
pay…
suppliers for stock
overheads such as rent, insurance
employees wages
prevent business failure (insolvency)
what is difference about cash and profit
cash is the money that business can spend right now, profit is the left over money that business makes after covering all costs. It’sItsdifferent becuase the business can make profit but still lose cash if customers delay payment.
define cash flows
the money that comes in and out of a business
define cash inflows
money coming into a business
define cash outflows
money coming out of a business
how would you find the net cash flow
cash inflows - cash outflows
what is the answer
6000 - 4000 =2,000
how would you calculate the opening balance
opening balance = closing balance previous period
what is the formula for closing balance
net cash flow + opening balance
why are cash forecast useful
helps avoid insolvency
helps financial planning
helps decision making
monitors business performance
Note 
Flashcards (34)