1. Look at the following infographic
Think pair share:
How might this affect a small business?

2. GCSE Business Studies
Cashflow
Beauchamps High School

3. Learning Objectives by the end of this lesson students….
Will be able to evaluate how a business can respond to negative cashflow
Evaluation ~ GCSE Grade A*
Will be able to propose methods to improve cashflow
Synthesis~ GCSE Grade A
Will be able to analyse the importance of good cashflow to a business
Analysis ~ GCSE Grade B
Will be able to demonstrate understanding by using examples/cases
Application ~ GCSE Grade C
Will be able to explain what affects cashflow
Comprehension ~ GCSE Grade D
Will be able to recall key terms cashflow, inflow and outflow
Knowledge ~ GCSE Grade E
Progress Arrow

4. The flow of cash into and out of a business
Theory
Notes
Cash Flow
The flow of cash into and out of a business
Beauchamps High School

5. Cash flowing into a business, its receipts
Theory
Notes
Inflows
Cash flowing into a business, its receipts
Beauchamps High School

6. Cash flowing out of a business, its payments
Theory
Notes
outflows
Cash flowing out of a business, its payments
Beauchamps High School

7. Cash flow Inflows Outflows Own money invested in business Bank loan
Theory
Notes
Cash flow
Inflows
Own money invested in business
Bank loan
Cash from sales
Outflows
Wages
Equipment
Telephone, gas, electricity and other bills
Interest on loan
Advertising
Beauchamps High School

8. Theory
Notes
Net Cash Flow
This is the money left over when a business takes its outflows from its inflows.
Receipts of a business minus its payments
For example: If Cadbury have:
£30,000 per month coming in
pay out £10,000 in costs
NET CASH FLOW is £20,000
Beauchamps High School

9. The importance of Cash flow
Theory
Notes
The importance of Cash flow
Businesses cannot survive without cash
Completely running out of cash will mean the business will fail
Progress Arrow
Beauchamps High School

10. Cash Flow is not the same as Profit
A business still fail (bankrupt) even though books show a profit
How is this?
Because of poor cashflow!!
Beauchamps High School

11. Against the Clock
You have 5 minutes in groups (before the sand runs out!) to write on your whiteboards:
The inflows and outflows for a business such as Cadbury
Now Feedback to class

12. Theory
Notes
Cash Flow Forecast
Prediction of how cash will flow through a business in a period of time
Beauchamps High School

13. Cash flow forecast Its used to see: How well they should be performing
Theory
Notes
Cash flow forecast
Its used to see:
How well they should be performing
If action needs to be taken to avoid a cash crisis
Help apply for/secure loans from the bank
Beauchamps High School

14. Cash flow forecast Opening balance Closing balance
Theory
Notes
Cash flow forecast
Opening balance
Amount of money in a business at the start of the month
Closing balance
Amount of money in a business at the end of a month
Beauchamps High School

15. Review homework – Anna Mull the gardener
Beauchamps High School

16. What affects Cash flow? Sales can change Costs can change
Theory
Notes
What affects Cash flow?
Sales can change
Costs can change
Credit terms can change
Stock levels can change
Beauchamps High School

17. Theory
Notes
The Business Plan
A plan for the development of a business giving forecasts of items such as sales, costs and cash flow
Beauchamps High School

18. Purpose of a business plan
Theory
Notes
Purpose of a business plan
Gets owners to think about all aspects of their business, including financial calculations
Help bank manager and investors to see if the business stands a chance of being successful
Beauchamps High School

19. Contents of a business plan
Theory
Notes
Contents of a business plan
Name of the business and brief outline of what the business is
Who are the main competitors likely to be?
What equipment is needed and costs
Premises needed
Suppliers to the business
Key personnel and job roles
Production methods used
Marketing
Total costs and revenues
Cash flow for first 12 months
Sources of finance for the start-up
Progress Arrow
Beauchamps High School

20. Homework task
Beauchamps High School

21. Learning Objectives by the end of this lesson students….
Will be able to evaluate how a business can respond to negative cashflow
Evaluation ~ GCSE Grade A*
Will be able to propose methods to improve cashflow
Synthesis~ GCSE Grade A
Will be able to analyse the importance of good cashflow to a business
Analysis ~ GCSE Grade B
Will be able to demonstrate understanding by using examples/cases
Application ~ GCSE Grade C
Will be able to explain what affects cashflow
Comprehension ~ GCSE Grade D
Will be able to recall key terms cashflow, inflow and outflow
Knowledge ~ GCSE Grade E
Progress Arrow