Analysing cash flow Flashcards
(5 cards)
1
Q
Cash flow.
A
Cash flow forecasts tell you when a business might not have enough money to cover its outflows. This is called a ‘deficit’.
2
Q
Cash flow.
A
They can also tell you when a business might have extra money in their account. This is called a ‘surplus’.
3
Q
Cash deficit.
A
A cash flow forecast can be used to predict when a business will have negating cash flow or a deficit.
4
Q
Cash surplus.
A
A cash flow forecast can predict when a business will have a cash surplus.
5
Q
Cash surplus.
A
A business should have enough money to cover its outflows, and a bit extra in case of any unexpected costs.
