Flashcards in 3.3 Cash Flow Deck (8)
What is Cash Flow?
Money going in and out of the business
Give the formula for Net Cash Flow
Net Cash Flow = Receipts - Payments
What is an Opening Balance?
The cash position of a business at the start of the month
(Also closing balance of previous month)
Give the formula for Closing Balance
Closing Balance = Net Cash Flow + Opening Balance
(It becomes the opening balance of next month)
What are Cash Flow Statements?
Financial Documents which analyse the past inflows and outflows of cash in a business
What do Cash Flow Forecasts help to predict?
When firms might face a liquidity problem
What is liquidity problem?
Lack of cash