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5 Cards in this Set
- Front
- Back
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Cash flow |
The flow of money in and out of the business Flows in; revenue, payments by debtors, loans, interest payments Flows out; wages, stock replenishment, payments to creditors, loan repayments |
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Cash flow cycle |
Cash into the business > used for raw materials > products made > goods and services sold for cash (repeat) |
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Net cash flow (net monthly balance) |
Inflow - outflow |
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Problems with cashlow forecasts |
- Estimates of costs may be wrong - start up companies may lack experience - doesn't account for changes in the economy I.e. unemployment rates, brexit - doesn't account for fashion and fads |
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Ways to improve cashflow |
- increase sales - reduce costs - overdraft - loan - trade credit - sell/lease back assets |
