1. FORECASTING CASH FLOWS LO: TO UNDERSTAND THE PURPOSE AND FUNCTIONS OF A CASH FLOW FORECAST

2. THE CASH FLOW FORECAST A business will estimate; How much it will sell How much it will cost to make what is sold How much fixed costs will be A business then makes sure it has enough cash. This is done using a cash flow forecast. Lo: To understand the purpose and functions of a cash flow forecast

3. INFLOWS Sales Revenue- received from customers Capital- received from selling assets Grants – received from the government Loans – received from banks LO: To understand the purpose and functions of a cash flow forecast

4. OUTFLOWS Wages Equipment Raw materials Tax Rent Utilities Telephone, gas, electricity LO: To understand the purpose and functions of a cash flow forecast

5. THE CASH FLOW FORECAST A cashflow summarises the money going in and out of a business. Each month has a separate column Each column is split into three sections.

6. SECTIONS OF A CASHFLOW

7. TASK Monsters Mint cash flow Cash flow quiz Cash flow mock.

8. IMPORTANCE OF CASHFLOW The business cannot survive without cash A business needs cash on a day-to-day basis A business is most likely to close if it has no cash.

9. CASHFLOW PROBLEMS More cash leaving the business than is going in An accumulation of negative cash flow.

10. WHAT AFFECTS CASH FLOW? Sales can change Costs can change Credit terms can change Stock levels can change

11. RULES OF CASH FLOW

12. EXAM QUESTION