Cash Flow Forecast

what is a Cash Flow Forecast? Choose 2.

• It is a report that shows how much money a business expects to receive in, and pay out, over a given period of time

• A report that shows the amount of cash which goes in and out of a business over a certain period of time.

• A report about how successful the business is in terms of keeping their staff.

What is the formula used for a cash flow forecast?

• [ Receipts - Payments = Net Cash Flow ] + Opening Balance = Closing Balance.

• [ Receipts - Payments = Net Cash Flow ] - Opening Balance = Closing Balance.

A cash flow statement shows an overview of money flowing in and out of a company

• True

• False

Which of the following is NOT a use of cash-flow forecasts?

• They indicate how much cash is available for paying bills
• They show how much the bank needs to lend to stop insolvency
• They indicate whether the business is holding too much cash
• They indicate how much profit the business will make

Which of the following is the value of x?

• £2

• £4

• £6

• (£2)

Which of the following is the value of y?

• £4

• £6

• £9

• (£9)

A firm is forecast to have a negative closing bank balance. Which would reduce the problem?

• sell more goods on 4 months credit
• produce more goods
• ask customers to pay in cash and not sell goods on credit
• ask suppliers if the firm can pay for goods in cash

If a cashflow forecast suggests that a firm will run out of cash, which would help the problem?

• purchase more fixed assets
• repay a bank loan
• pay suppliers immediately
• delay paying suppliers

The closing bank balance is calculated by:

• opening bank balance + cash out-flow
• opening bank balance + cash in-flow
• opening bank balance + net cash flow
• net cash flow + gross profit

In a given cash flow forecast, the closing balance in June would become the ____________ of July.

• Closing balance

• Working capital

• Net cash flow

• Opening balance