CrtBussStartUp U3: LEGAL & FIN CONSD FOR A BUSS STARTUP - DAY 2

What is the purpose of a cash flow forecast in a business start-up?

• To estimate all business costs and potential sales

• To determine the business's profit margin

• To calculate employee salaries

• To set the business's long-term goals

How is a cash flow forecast usually structured?

• As a daily summary

• As a month-by-month summary

• As a yearly summary

• As a weekly summary

What is the main goal of a cash flow forecast?

• To increase sales

• To see if there will be a cash shortfall

• To reduce expenses

• To hire more staff

What is the significance of turnover in business?

• It measures employee satisfaction

• It describes the total sales of a business

• It indicates the business's profit margin

• It shows the business's total assets

What might an investor expect in return for investing in a business?

• A share of the profits

• Free products

• A permanent job

• A company car

Why might a business not charge the full cost of a fixed asset against profit in one year?

• To increase cash flow

• To properly reflect asset usage over time

• To avoid paying taxes

• To increase turnover

What is a key benefit of preparing a cash flow forecast?

• To predict future sales trends

• To manage liquidity effectively

• To determine employee bonuses

• To set marketing budgets

How does turnover differ from profit in a business context?

• Turnover is calculated annually, while profit is calculated monthly

• Turnover is the total revenue, while profit is revenue minus expenses

• Turnover is a measure of assets, while profit is a measure of liabilities

• Turnover includes only cash sales, while profit includes all sales

Why is it important for a business to monitor its cash flow regularly?

• To avoid unexpected cash shortages

• To maintain a positive relationship with suppliers

• To increase the company's market share

• To ensure compliance with tax regulations

What is the primary reason for a business to maintain a positive cash flow?

• To increase employee salaries

• To reduce product prices

• To expand into new markets

• To ensure operational stability