2.1.4 Planning

Question 1

What are the 3 sections of the cash flow forecast?

Answer 1

• Cash In
• Cash out
• Net Cash Flow

Question 2

Formula for Cash Flow?

Answer 2

Inflows - Outflows

Question 3

Use of Cash Flow Forecast?

Answer 3

• To support an application of lending
• To support budgeting process
• To identify potential cash flow issues

Question 4

Limitations of Cash Flow forecast?

Answer 4

• Only takes account for one variable (cash)
• It is all estimates

Question 5

What are the cash flow variables?

Answer 5

• Opening balance
• Cash inflows
• Cash outflows
• Closing balance