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Cash Flow Management

Total questions: 28

Worksheet time: 15mins

Name
Class
Date
1.

The amount of cash moving into and out of a business

a)

Cash Flow

b)

Net Worth

2.

Money received from a business investor would be an example of

a)

cash inflow

b)

cash outflow

3.

selling an asset would be an example of

a)

cash inflow

b)

cash outflow

4.

paying the rent would be an example of

a)

cash inflow

b)

cash outflow

5.

purchasing an asset would be an example of

a)

cash inflow

b)

cash outflow

6.

Ideally, the net cash flow should be

a)

positive

b)

negative

7.

One way that a firm could increase the amount of cash it has on hand is to reduce ____________

a)

Credit

b)

Outflows

c)

Inflows

d)

Insolvency

8.

Why is this firm's level of cash increasing?

a)

There is more cash inflow compared to outflows

b)

There is less cash inflow compared to outflows

c)

The firm is profitable

d)

The firm is unprofitable

9.
If a company sells 400 units of their product at an average price of $15 per unit, what is their total revenue?
a)
$6,000
b)
$4,500
c)
$4,000
d)
$7,500
10.
A firm produces 500 units at a total cost of $2,000. What is their average total cost of production?
a)
$4 per unit
b)
$5 per unit
c)
$3 per unit
d)
$2 per unit
11.
The total cost for a company is $50. If the total variable cost is $20, then what is the total fixed cost for the company?
a)
$20
b)
$30
c)
$40
d)
$10
12.
If a cashflow forecast suggests that a firm will run out of cash, which would help the problem?
a)
purchase more fixed assets
b)
repay a bank loan
c)
pay suppliers immediately
d)
delay paying suppliers
13.
Which of the following is true about cash flow?
a)
It is the same as profit
b)
It is different from profit
c)
It is the same as revenue
14.

What is the purpose of a cash flow forecast?

a)

To calculate profit or loss

b)

To find out whether a business has enough cash to pay their bills

c)

To find out when customers are going to pay their invoices

d)

To see if the business will break even

15.
Which is the best explanation for a business running into cash-flow problems?
a)
demanding quick payment from customers
b)
allowing customers a long credit period
c)
delaying payments to suppliers
d)
producing goods when demanded by customers
16.
Which of the following is NOT a use of cash-flow forecasts?
a)
They indicate how much cash is available for paying bills
b)
They show how much the bank needs to lend to stop insolvency
c)
They indicate whether the business is holding too much cash
d)
They indicate how much profit the business will make
17.
Business cash flow forecasts are of use in all of the following situations except:
a)
calculating last year’s profit or loss
b)
finding out how much cash will be needed to start a business
c)
keeping informed about the liquidity of the business
d)
helping the manager to plan when to borrow money
18.

Government Grants

a)

Cash Inflow

b)

Cash Outflow

19.

Paying for raw materials for your product

a)

Cash Inflow

b)

Cash Outflow

20.

Receiving cash from a bank loan

a)

Cash Inflow

b)

Cash Outflow

21.

Buying Machinery

a)

Cash Inflow

b)

Cash Outflow

22.

Which one of the following ISN’T a way of cash outflow?

a)

Purchasing goods & services

b)

Paying wages, salaries and expenses

c)

Paying creditors

d)

Borrowing money from external sources

23.
What is a long term way to improve cash inflow?
a)
Take out a loan
b)
Take out an overdraft
c)
Use a factoring service
24.

Grants usually come from

a)

Big businesses

b)

Governments

c)

Loans

d)

Small Businesses

25.

Leasing or hire purchase you own the item immediately

a)

True

b)

False

26.

Overdrafts are used for short term finance

a)

True

b)

False

c)

Both

27.

Which 2 examples are internal finance

a)

Sales of assets

b)

Grants

c)

Retained profits

d)

leasing

28.
A firm is forecast to have a negative closing bank balance. Which would reduce the problem?
a)
sell more goods on 4 months credit
b)
produce more goods
c)
ask customers to pay in cash and not sell goods on credit
d)
ask suppliers if the firm can pay for goods in cash

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