G 10 Cash flow forecasting and working capital

___ is a cash inflow for a car manufacturing business.

• Purchase of car component

• Payment for cars for costumers

• Purchase of a machine for production

• Payment for purchase of land to build a new factory

___ is a cash outflow for a clothes retailer.

• Cash from the sales of assets

• Payment from costumers for the purchase of clothes

• Cash for the retailer from the sales of share

• Payment to the suppliers of clothes

A ___ net cash flow will increase the closing balance

• negative

• positive

• equal

• final

A short-term cash flow problem may be overcome by ___ payments to suppliers.

• increasing

• speeding up

• delaying

• making

___ may be held in the form of cash, value of debts owed to the business or the value of inventories.

• Working capital

• Gross profit

• Share value

• Capital employed

A positive cash flow must mean the business is making a profit.

• True

• False

Producing a cash flow forecast ensures the business does not run out of cash

• True

• False

Arranging an overdraft can help overcome short-term cash flow problems.

• True

• False

A business cannot run successfully without a sufficient quantity of working capital

• True

• False