G 11 Forecasting and Managing Cash Flow

Which of the following is an example of a cash flow?

• A new asset

• The value of stocks

• Cash sales

• Cash purchases

Which best describes a firm in liquidation?

• It has an excess of liquid assets

• It cannot meet its short term debts

• It's ceased trading so that creditors can be paid through the sale of assets

• Its sales are failing

Which one of the following is true?

• Profit is revenue less costs

• Profit is the same as net cash flow

• Profit is what is left after cash outflows are deducted

• Profit is always bigger than net cash flow

Which one of the following is true?

• Depreciation is an item in cash flow forecasts

• Depreciation isn't an item in cash flow in calculating profit

• Depreciation is part of the profit calculation

• Depreciation is added to profit

Which of the following is best describes a cash flow forecast?

• It forecasts future profits

• It compares future inflows with revenues

• It compares future outflows with revenues

• It compares future inflows and outflows

The fashion shop business has too much working capital. Which of the following might be a solution to the problem?

• Repay loans

• Increase prices

• Reduce wages costs

• Take out a short term loan

A retailer of computers has decided to improve its credit control. Which one is likely to be the reason?

• It is finding it difficult to find suppliers

• It is finding costumers are late with their payments

• It has a cash flow surplus

• It has too much inventory

Which one is the limitations of cash flow forecasts?

• Aid decision making

• Only as good as initial assumptions

• Setting targets

• Planning when setting up a business

Which one is NOT the factors of cash problems?

• Too much credit

• Lack of planning

• Identifying possible future cash problems

• Unexpected events

Raw materials bought on credit are included in?

• costs

• Profit

• Revenue

• Depreciation