Not a cause of cash-flow problems?

creditors extending payment periods

Importance of cash flow planning?

convince prominent financial institution for loan grant, balances cash in advance, accurate planning & monitoring of budget

cust.s who bought goods in credit&will pay in cash @set date

How can credit be managed?

Extend the period of time taken to pay

What is opening cash balance?

cash held by the business at start of month

What is net monthly cash flow?

estimated difference between monthly cash inflows & outflows

What is meant by the term 'insolvent'?

when a business cannot meet its short-term debts

One of the ways to improve cash flow

Increase cash inflows, Decrease cash outflows

studbud

Business Finance - Forecasting Cash Flows

15 termsStudBud Administration134 plays

#businessstudies #businessfinance #forecastingcashflows

Flashcards15 cardsFPractice quizPHost liveL

Questions 15

Answers

1
What is cash flow?
Cash Outflow - Cash Inflow
Cash Inflow - Cash Outflow
2
Not a cause of cash-flow problems?
allowing customers too long to pay debts
poor credit control
creditors extending payment periods
lack of planning
3
Importance of cash flow planning?
convince prominent financial institution for loan grant
balances cash in advance
accurate planning & monitoring of budget
better customer satisfaction
4
Inventory can be managed through
wise use or investment of excess cash
extend the period of time taken to pay
offering a discount to clients who pay promptly
using computer systems
5
Debtors?
suppliers who agree to supply on credit & haven't been paid
cust.s who bought goods in credit&will pay in cash @set date
6
How can credit be managed?
Extend the period of time taken to pay
Offering discounts for prompt-paying customers
Not extending credit to customers
Debt factoring
7
What is opening cash balance?
cash held by the business at start of month
cash held @end of month&becomes next month's opening balance
8
What is net monthly cash flow?
estimate of a firm's future cash inflows & outflows
estimated difference between monthly cash inflows & outflows
9
What is meant by the term 'insolvent'?
when a business sells its assets for cash
when a business cannot meet its short-term debts
when a business expands rapidly but with cash-flow shortage
when a business ceases trading
10
Cash flow is positive when CI < CO
False
True
11
Which is not a part of the cash-flow forecast structure?
Cash outflows
Net monthly cash flow and opening & closing balance
Cash inflows
Capital expenditure
12
Limitation of cash-flow forecasting?
Monitor income & expenses
Inaccurate sales assumption
13
Not a form of forecasting cash inflow
Bank loan payments
Debtors' payments
Customers' cash purchases
Annual rent payments
14
One of the ways to improve cash flow
Increase cash inflows
Decrease cash inflows
Increase cash outflows
Decrease cash outflows
15
Not a method to increase cash inflow
Sale of assets
Reduce credit terms to customers
Cut overhead spending
Overdraft

Business Finance - Forecasting Cash Flows Flashcards | StudBud