GCSE cashflow

Cash is not as important as profit

Cash flow is the movement of cash into and out of a business

Net cash flow equals receipts (inflows) minus payments (outflows)

To improve cash flow businesses could negotiate longer payment terms with their suppliers

To improve cash flow, businesses should aim to reduce cash inflows

Poor cash flow is rarely a reason why businesses fail

During a recession it is usually easy to borrow money

Management accountants can help firms to manage their cash flow

Receipts are inflows of cash from things like sales of goods and interest on investments

The closing balance can be calculated by combining the net cash flow with the opening balance