1.3.3 - Cash Flow Forecasting

What is a cash flow forecast?

• A way to determine employee satisfaction

• A strategy for marketing

• A method to calculate profit and loss

• A tool to estimate money coming in and out of a business over a period

What is cash inflow?

• Money going out of the business

• Money coming into the business

• The total expenses of a business

• The net profit of a business

What is net cash flow?

• The profit after tax

• The total expenses of a business

• The total revenue of a business

• The difference between cash inflows and cash outflows

What does a positive net cash flow indicate?

• The business is in financial trouble

• The business is breaking even

• More money is coming in than going out

• More money is going out than coming in

Why is cash flow forecasting important?

• To predict cash shortages and prevent insolvency

• To set marketing strategies

• To determine employee performance

• To calculate taxes

What is a common cash inflow for a business?

• Employee wages

• Utility bills

• Insurance payments

• Sales to customers

What is a common cash outflow for a business?

• Rental income

• Employee wages

• Capital from investors

• Sales revenue

What is the opening balance?

• The bank balance at the start of the period

• The total revenue for the month

• The profit at the end of the period

• The total expenses for the month

How is the total inflow calculated?

• By calculating the net profit

• By adding all cash inflows together

• By subtracting expenses from revenue

• By adding all cash outflows together

What does the closing balance represent?

• The total expenses for the month

• The actual cash left at the end of the period

• The total revenue for the month

• The net profit for the month