Cash and cash flow (OCR GCSE Business): Flashcards
📚Flashcards
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13 cards from this deck
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Practise the cards
13 cards from this deck
What does cash provide to a business?
What does cash provide to a business?
Liquidity
Definition of cash in business
Definition of cash in business
Actual money on premises or in bank accounts
Definition of profit
Definition of profit
Difference between sales revenue and production costs
Relationship between profit and cash shortages
Relationship between profit and cash shortages
Business can be profitable but still face cash shortages
What cash flow forecasting predicts
What cash flow forecasting predicts
Flow of money into and out of business over a period
Cash flow forecast as planning tool
Cash flow forecast as planning tool
Shows if business has enough liquidity to pay bills
Cash flow forecast benefit: anticipating
Cash flow forecast benefit: anticipating
Identifies periods of potential cash shortages
One way to deal with cash shortage (finance)
One way to deal with cash shortage (finance)
Arranging for finance
One way to deal with cash shortage (costs)
One way to deal with cash shortage (costs)
Reducing spending
Cash flow forecast benefit: targets
Cash flow forecast benefit: targets
Helps set cash flow targets to meet obligations
First step in cash flow forecast
First step in cash flow forecast
Add all cash inflows for the month
How to calculate net cash flow
How to calculate net cash flow
Subtract total outflows from total inflows
How to calculate closing balance
How to calculate closing balance
Add net cash flow to opening balance