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Flashcards in Cah Flow Forecast Deck (7)
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1

Benefit of cash flow forecast

Identify problems in advance to secure other finance

2

Disadvantage of cash flow forecast

Assumes all products are sold
Could be external factors (eg brexit)

3

3 steps to answer

Knowledge
Application (case study)
Explanation

4

Cash flow forecast definition

Estimate of amount of income and expenditure

5

What does positive net cash flow mean

Flow of money in to bank account is greater than flow out

6

How can a forecasted problem be prevented?

Increase income (loan)
Reduce expenditure (negotiate)
Trade credit (ask for delayed payment)

7

What will a constant negative cash flow mean?

Go out of business as you cannot afford expenses