Worksheets6.2 Cash flow
Total questions: 15
Worksheet time: 10mins
For a future time period, a cash flow forecast predicts :
The profit or loss a business will make
The break-even level of output
The money flowing into and out of the business
The average rate of return on an investment
On a cash flow forecast, which of the following is another commonly used key term for a cash inflow?
A receipt
A payment
Profit
Expenditure
A negative figure on the closing balance of a cash flow forecast is called a:
Surplus
Profit
Deficit
Loss
Which of the following is an example of a cash inflow?
Salaries
Telephone
Rent
Government grant
The correct formula to calculate net cash flow in a cash flow forecast is:
Total cash inflows – total cash outflows
Total cash outflows – total cash inflows
Opening balance - closing balance
Opening balance + closing balance
Based on this information, the opening balance for April will be:
(£4,333)
(£14,333)
£109,641
£119,641
Based on this information, the closing balance for July will be:
£98,000
£150,000
£174,000
£320,000
A business negotiates an increase in the length of time allowed to pay its suppliers from four to six weeks. This possible solution to solving the business’s cash flow problems is called:
Hire purchase
Share capital
An overdraft
Trade credit
Which of the following is a reason why a business should construct a cash flow forecast?
It informs shareholders if the business is making a profit/loss
It helps managers to prepare for any future cash shortfall
It enables managers to calculate profitability ratios
It enables the owners to assess past financial performance
Based on this information, the total cash inflows for January will be:
£70,000
£100,000
£130,000
£210,000
The benefit to a business of having a positive cash flow position is:
The business will always make a profit
The business will no longer need to produce a cash flow forecast
The business will never make a loss
It will help the business to survive
Which of the following organisations is most likely to offer trade credit to its customers?
Sainsbury
H&M
Screwfix
Oxfam
Based on this information, the most likely reason why the zoo will experience cash flow problems in the first quarter of the year is:
The zoo will employ temporary staff to cope with seasonal customer demand
The zoo will be closed
It will receive a large loan in this quarter from the bank
Four weeks trade credit will be given to its loyal customers
Based on this information, which of the following would be a suitable way for the business to improve its cash flow position?
Increase customer credit period and reduce supplier credit period
Reduce customer credit period and increase supplier credit period
Increase credit period with both customers and suppliers
Reduce credit period with both customers and suppliers
Which of the following statements is true in relation to cash flow and/or profit?
Cash flow and profit have the same meaning in business
Businesses should always be more concerned about profit than cash
The profit figure is always shown in the cash flow forecast
A positive cash flow is important to ensure business survival
