Task One:
Define each of these terms and give examples.
Term Definition
Cash Flow
Cash Flow
Forecast
Cash Flow
Statement
Cash
Inflows
Cash
Outflows
Net Cash
Flow
Task Two:
Fill in the blank spaces to complete this information about cash flow.
Cash flow forecasting shows the future with predicted
_________ and ___________ over _________.
This is always easier to do for an _______________ business
because the managers have more _________________ and
knowledge on which to base their decisions
They also need to consider _____________ demand for their
goods and any specific plans for the business.
They can also take the appropriate action to try to ensure that
all the income is used wisely, such as moving _________
surpluses to an account that pays better interest or investing in
machinery to ______________ the business.
They can see which months may be problematic and take action
to ensure they have the relevant sources of finance to help
solve any problems.
This may mean arranging an _____________for a short time or
chasing up any bad __________ where people are paying you
too late.
The business must monitor its cash flow position and investigate
any differences between the forecast figures and actual inflows
and take the required _________________
Experience Action Expand Outflows
Inflows Future Cash Debts
Time Established
Overdraft
Task Three: Use the following information to complete the cash flow statement for the first
quarter on the following page.
Predicted sales will be $2,000 per month except Peak Time (February & March)
where the sales will rise to $4,000
Investment paid into cash account $5,000 (in January)
Loan Repayments are $200 a month
Rent repayments are $500 a month
Stock costs will be $1000 per month except Peak Time (February & March)
where the stock costs will rise to $1500.
Wages will be $500 a month except Peak Time where wages will double.
Advertising $50
Van $4,000 purchase (in January)
Equipment sale $1000 (in March)
Computer system $500 (in February)
Opening balance $10,000
Electricity $500 (paid once in quarterly)
Gas $500 (paid once quarterly)
Remember – Net Cash Flow = Cash Inflow – Cash outflow
Jan Feb March
Opening Balance
Inflow
Outflow
Total
Cash Balance
(Net Cash)
Cash flow statement for Urban Oasis Landscapes, Quarter 1, 2023
Task Four: se the following information to complete the cash flow statement for the 2022
financial year on the following page.
Actual sales were $1000 per month apart from
January and February - $500
July and August - $2,000
November and December - $500
Investment Returns in Bank $6000 (in January)
Rent repayments are $750 a month
Stock costs were $800 per month except Peak Time (July and August)
July and August - $1000
Wages were $500 a month except Peak Time which were $1000.
Van Rental $2,000 (in January)
Equipment Sales $1000(in June)
Computer system purchase $500(in January)
Opening balance $10,000
Electricity $500 (paid quarterly January, April, July, October)
Gas $500 (paid quarterly January, April, July, October)
Remember – Net Cash Flow = Cash Inflow – Cash outflow
JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC
INCOME (Inflow)
TOTAL INCOME
EXPENDITURE (Outflow)
TOTAL EXPENDITURE
NET CASHFLOW
Task Five:
Evaluate the importance of cash flow for the effective management of business finance.
Choose either Urban Oasis Landscapes or autumn garden and write to the business owner
describing their current cash flow forecast/statement.
Make them aware of any potential issues that you think may be damaging to the
business.
What recommendations or changes would you make?
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