Cash flow forecasting and problems (AQA GCSE Business): Quizzes
📚Quizzes
Practise the questions
12 questions from this quiz
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Practise the questions
12 questions from this quiz
What is the main purpose of cash flow forecasting?
What is the main purpose of cash flow forecasting?
To spot potential cash shortages early
How is net cash flow calculated?
How is net cash flow calculated?
Cash inflows - cash outflows
How is closing balance calculated in a cash flow forecast?
How is closing balance calculated in a cash flow forecast?
Net cash flow + opening balance
What does a negative closing balance shown in brackets indicate?
What does a negative closing balance shown in brackets indicate?
Potential cash flow problems
When do cash flow problems typically occur?
When do cash flow problems typically occur?
When outflows exceed inflows
Why do low profits or losses cause cash flow problems?
Why do low profits or losses cause cash flow problems?
They eventually run out of cash
Why does over-investment in capacity cause cash flow problems?
Why does over-investment in capacity cause cash flow problems?
Unused equipment doesn't generate revenue
How does holding too much stock create cash flow problems?
How does holding too much stock create cash flow problems?
It ties up cash and risks obsolescence
What is overtrading?
What is overtrading?
Expanding too quickly
Can a profitable business still have cash flow problems?
Can a profitable business still have cash flow problems?
Yes, if customers owe unpaid invoices
What is described as the most direct and effective way to improve cash flow?
What is described as the most direct and effective way to improve cash flow?
Cost cutting
What is the main risk of delaying payments to suppliers?
What is the main risk of delaying payments to suppliers?
Damaging supplier relationships