CASH FLOW

Why is the cash flow important?

• To know the available cash to pay

• To know if the business is being efficient with its cash

• To avoid insolvency

• All are correct

Which one is the working capital formula?

• Working capital = cash received - cash spent.

• Working capital = current assets - current liabilities.

• Working capital = operating cash flow - capital expenditures.

Why is the cash flow forecast important?

• To know if the business is holding too much cash that could be used in a more profitable way.

• To know how much money ask the bank for.

• To help the manger to know the available cash to pay/purchase.

• All the above.

Which one of these is NOT a type of activity presented on the statement of cash flows?

• Producing.

• Investing.

• Operating.

• Financing.

What means "cash flow as a liquid asset"?

• That it assess a company's profitability.

• That is immediately available for spending on goods and services.

• That it includes all purchases of capital assets and investments in other business ventures.

• That it represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

Which of these is NOT a goal of the cash flow forecast?

• Start up a business

• Run an existing business

• Be 100% accurate

• Keep the bank informed

Which one of the following ISN’T a way of cash outflow?

• Purchasing goods & services

• Paying wages, salaries and expenses

• Paying creditors

• Borrowing money from external sources

How is it called when a Business runs out of cash?

• Inflow

• Insolvency

• Insufficiency

• Inaccuracy

Which of these ISN’T a way of holding working capital?

• Cash

• A company car

• Debtors

• Inventories

Which of the following ISN'T a cash flow problem?

• Higher cash inflow than cash outflow

• Sudden fall in sales

• Unforeseen expenses

• Debtors payback period is too long