What is the role of understanding cash flow in a business?

• It helps in the decision-making process.

• It increases the company's profits.

• It reduces the need for financial advisors.

• It eliminates all financial risks.

What is a cash flow forecast?

• A document that estimates future profits.

• A document that helps estimate the amount of money moving in and out of a business.

• A report on past financial performance.

• A strategy for reducing expenses.

What does a healthy cash flow enable a business to do?

• Increase its market share.

• Meet its short-term outflows when needed.

• Expand into new markets.

• Hire more employees.

What is a cash flow forecast?

• A historical record of past cash flows

• An educated prediction of future cash flow

• A detailed list of expenses

• A summary of annual profits

How can a business use a cash flow forecast when there is a surplus?

• Increase production

• Save money for future shortages

• Hire more employees

• Expand to new markets

What might a business do if revenue is predicted to be low?

• Increase salaries

• Launch a promotion

• Open new branches

• Hire more staff

What is the main benefit of a cash flow forecast for a business?

• It guarantees profit

• It helps make decisions before issues arise

• It eliminates all financial risks

• It ensures constant revenue

What is a cash flow forecast used to investigate?

• The future inflows and outflows of a business

• The past profits of a business

• The employee satisfaction levels

• The market competition

Which of the following is considered a common inflow in a cash flow forecast?

• Cash sales

• Employee salaries

• Office supplies

• Marketing expenses

What indicates a healthy cash flow in a business?

• Greater inflows than outflows

• More expenses than income

• Equal inflows and outflows

• Greater outflows than inflows