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annual cash flow forecast

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BTEC First Diploma in Business Unit 3 Investigating Financial Control Introduction: In this assignment i will prepare an annual cash flow forecast using monthly datas and analyse the implications of regular and irregular cash inflows and outflows for a business organisation. I will also evaluate how cash flows and financial recording systems can contribute to managing business finances. Task 1 a Cash flow: Cash flow relates to the amount of money received and spent in the goven period. Cash flow problems occur when the amount spent is greater than the amount received. Cash flow statement: A Cash flow statement are normally product in a little more detail than the summary statements. Cash flow forecast: Cash flow forecast means preparing a cash flow statement for the future with predicted inflows and outflows. This is always easier to do for an established business because managers have more experience and knowledge on which to base their decision. ( Reference: BTEC First Business 2nd edition, Carol Caryforth and Mike Neild, Page 108, 113 and 114) ...read more.


If whe have regular inflows and outflows that will be very good for our business because that would mean that we can plan better for our future cash flow. Task 2 c Down 2 u will be affected if the inflows and outflows are irregular because we will not know how much we would receive for the month and we will not be able to plan for our income for the next comin month. And it can also put our business in debits because if we dont make any profit or dont have our breakeven then we will not be able to pay for our stock and other payments that we have to pay every month. But if our inflows and outflows are regular it will not affect our business because we will exactly know how much we will make in the month and in some other month aswell and we can plan for the future form our business. Task 3 In this task i should make references for: * Seasonal variation: This will affect our business because in every season we generate a different cash inflow and outflow. ...read more.


Cash flow also allows us to know if we are able to invest on our business. Managment of these factors will help us to be able to plan and predict future cost so that we can be able to manage our costs during the months that we are not selling much. For example * Seasonal Variation if we are able to manage on the month we dont have a lot of customers then we will be able to plan and predict future inflow and outflows, we can do that if we are not spending too much during the season we always not have enaugh customer for example in march and april. * Late credit payment if we are able to manage this problem then we will be able to invest our money on our business because of we manage late credit payment then we will know that we will receive regular payment every month * Capital expenditure if we are ablte to manage this by making sure that we invest in things that will bring us money. ?? ?? ?? ?? Omobolanle Salami 23.04.2009 Assignment No. 03 Down 2 U Phone Page 1 ...read more.

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