Free Printable SGS Business 1.3.4 The Importance of Cash & Cash Flow

Worksheets

SGS Business 1.3.4 The Importance of Cash & Cash Flow

Total questions: 19

Worksheet time: 10mins

Name

Class

Date

If a company sells 400 units of their product at an average price of $15 per unit, what is their total revenue?

$6,000

$4,500

$4,000

$7,500

Which of the following is an example of a cash in-flow for a business?

payment to suppliers

paying back a loan to a bank

payment from debtors

purchase of fixed assets

Which of the following is an example of a cash out-flow for a business?

payments to creditors

sale of goods

payment from debtors

receiving a loan from the bank

INAC’s gross profit for July was:

$2,000

$1,500

$500

$2,500

INAC’s net cash flow for July was:

$2,000

$1,500

$500

$2,500

Which is the best explanation for a business running into cash-flow problems?

demanding quick payment from customers

allowing customers a long credit period

delaying payments to suppliers

producing goods when demanded by customers

Which of the following is NOT a use of cash-flow forecasts?

They indicate how much cash is available for paying bills

They show how much the bank needs to lend to stop insolvency

They indicate whether the business is holding too much cash

They indicate how much profit the business will make

Which of the following is the value of x? ($000)

($2)

Which of the following is the value of y? ($000)

($9)

10.

Which of the following is the value of z? ($000)

$(15)

$(5)

11.

Business cash flow forecasts are of use in all of the following situations except:

calculating last year’s profit or loss

finding out how much cash will be needed to start a business

keeping informed about the liquidity of the business

helping the manager to plan when to borrow money

12.

A firm is forecast to have a negative closing bank balance. Which would reduce the problem?

sell more goods on 4 months credit

produce more goods

ask customers to pay in cash and not sell goods on credit

ask suppliers if the firm can pay for goods in cash

13.

If a cashflow forecast suggests that a firm will run out of cash, which would help the problem?

purchase more fixed assets

repay a bank loan

pay suppliers immediately

delay paying suppliers

14.

The monthly net cash flow for a business is calculated by:

sales revenue - cost of goods sold

total cash in - total cash out

total cash out - total cash in

total cash in - cost of goods sold

15.

The closing bank balance is calculated by:

opening bank balance + cash out-flow

opening bank balance + cash in-flow

opening bank balance + net cash flow

net cash flow + gross profit

16.

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 margin of safety

17.

A negative figure on the closing balance of a cash-flow forecast is called

Surplus

Profit

Deficit

Loss

18.

Which two are benefits to a business of having a positive cash flow?

The business will be guaranteed to make a profit

The business will no longer need to produce a cash-flow forecast

All employees in the business will be highly productive

It will help to prevent insolvency

It will help to secure business survival

19.

Which two are ways a business could improve its cash flow position?

Increase overheads

Negotiate discounted prices with suppliers

Reduce receipts

Increase payments

Reduce stock levels in the business

Reset

SGS Business 1.3.4 The Importance of Cash & Cash Flow

Total questions: 19

Worksheet time: 10mins

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