• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Cash flow. A cash flow forecast is a document that predicts cash requirements in the future. It helps a business save money for things it may need in the future

Extracts from this document...


Cash Flow A cash flow forecast is a document that predicts cash requirements in the future. It helps a business save money for things it may need in the future. Financial problems may arise if the business has more outgoings than income, such as unpaid bills or sudden money loss making the business low on money. Another business could also owe money to yours and go bust. The business is most vulnerable to cash flow problems when they first start up as this is when there are more outgoings than money from customers. Certain areas, such as production, could have difficulties operating as the costs are too high. Businesses may also have cash flow problems due to other reasons, such as not selling as well as expected. A business can improve their financial situation by borrowing money from a bank, cutting costs or increasing sales. ...read more.


The garden centre has loaned money from the bank in order to grow the business, although the bank will expect the money back. The loan may be for growth of the centre, an addition, a new centre being built or high fees that need paying off. The areas of the business that receive the money will be maintenance, research, staff training and expansion. The leasing fee is the cost of the equipment that does not belong to you; it belongs to another company, and vice versa. You have to pay them a leasing fee to keep the assets in your possession. In this case, the garden centre is making money from the leasing as it is listed under the Cash Inflow section. The garden centre could make money by leasing premises to the public who may want to grow on their land, if they don't have a garden at home, or by letting another business operate in their premises. ...read more.


This may be needed for expansion or financial stability. Wages are needed so the business can carry on operating with staff. A telephone may be required so the business can do deals externally, contact other businesses or help customers via phone. Other costs may be for maintenance, rental of vans or other general costs the business may require. Total payments are the amount that the business has to pay back for all aforementioned services that they have paid for. Bottom Section The bottom section summarises financial all the financial activities carried out by the business. The opening balance is the balance that the company has brought forward from different activities, such as the previous year. Net cash flow is the cash receipts minus cash payments, essentially the amount of money the business keeps that is gained during this month. The closing balance is the balance of the business at the end of the measured period. (In this case, intervals of a month for the year) ?? ?? ?? ?? Bryn Roberts 10L ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Accounting & Finance section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Here's what a teacher thought of this essay

4 star(s)

A pretty thorough analysis of a cash flow forecast. There are some inaccuracies which I have pointed out.

Marked by teacher David Salter 21/03/2012

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Accounting & Finance essays

  1. Discuss the Need for Regulation in Financial Reporting

    If the manager of B&Q decides to depreciate its value over the years and the Homebase manager choose to write off the value in the year of purchase. Without some form of standardized accounting, it would be very difficult for other external users to compare the performances of these companies

  2. Hampton Machine Tools Company Case

    Hampton Machine Tool Company had requested renewal of an existing $1 million loan originally to be repaid on September 30. Aside from that, Hampton was also asking for an additional loan of $350,000 for planned equipment purchases in October. With respect to the terms of the company's request, both loans,

  1. In this assignment I am opening a tuck shop in the school grounds and ...

    The Table shows all the costs of each product. But I will not have all the goods on the table only the snacks which the customers want. (Table on next page) Drinks Amount of Cans Amount per Can (ML) Quality Price per can Full Price * Coca Cola 24 330 IMP 17p �3.99 Sprite 24 330 OK 20p �4.69

  2. Cash Flow Problem (Creative Letter)

    and therefore you could be able to increase cash inflow, with no extra expenses. However, you may not get many people who would want to rent a small amount of land and the people who do rent it may spoil the plants which you supply to your customers, also the

  1. Six month cash flow.

    put and the money that my partner puts next together then divided by 1,000 then I got 20:10 then divided by 10 as my result show is 2:1 so this is the ratio of me and my partner my ratio is 2 and my partner ratio is 1.

  2. Discuss the need for regulation in financial reporting.

    In that case, managers do not have access to information about all aspects of the organization's activites, which also helps the user accounts to compare the performance of an organization either through time or with the performance of other organizations.

  1. The purpose of this report is to explain the legal and regulatory influences on ...

    loophole for people to bring gains in reserves back into the P&L account at a later date. The STRGL seemed to threaten the clarity of the P&L account, therefore changes were to be made. FRS 3 stipulated that the P&L should be set out in a layered format to the

  2. Financial Services

    This report is due back on the 10th December 2004. 1.2Financial service providers Below are some of the financial providers * Investment companies * Insurance companies * Government I will talk briefly about each one and explain the benefits and the disadvantages of each.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work