Cash flow Flashcards
(5 cards)
1
Q
Cash flow
A
The movement of cash into and out of a business over a period of time.
2
Q
Cash flow forecast
A
The expected inflows and outflows over a period of time.
3
Q
The purpose of cash flow forecasts
A
- To support a business plan and therefore applications for a loan or for prospective investors.
- To enable a business to assess its working capital needs over time.
- To help avoid unexpected cash flow crises.
- To enable it to manage its payables (creditors) and receivables (debtors) effectively.
4
Q
Payable
A
The time taken to pay back trade creditors and suppliers.
5
Q
Receivables
A
The time taken for debtors and customers to pay you back.
