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

cash flow

Extracts from this document...


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 A Cash flow relates to the amount of money received and spent in the given period. Cash flow problems occur when the amount spent is greater than the amount received and Cash flow statement is normally produced in a little more detail than the summary statements. A cash flow statement or statement of cash flows is a financial statement that shows how the inflows and outflows affect the business. The cash flow statement is useful in determining the short-term usefulness of a business. It is good if you have to pay bills and 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. ...read more.


Task 2 a December and January was the month with regular inflows and outflows because during this time our inflows and outflows didnt change and this is good for our business because we will be able to plan our cash flow. It is better for down 2 u if we have a regular in and outflow because it will be easier for us to plan and predict our cash flows and we will be able to improve our business more better if we have a regular in and outflow. Task 2 b Regular in - and ourflows - This type of inflow is when the business offers customers discounts if they sign up to pay direct debit, which is a regular payment system this make it easier for the business to plan and predict cash flows. Irregular in - and outflows - This is when the business is not getting the same amount of inflow every month or spending differently every month on outflow. 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. ...read more.


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. What means we should know how t manage our inflows so that the outflows will not be greater than our outflows for that period. * Late credit payment if we are able to manage this problem then we will be able to invest our money on our business because if we manage late credit payment then we will know that we will receive regular payment every month. What means if we dont have late credit payments we will be able to know exactly how much inflows and outflows we have in that month. * Capital expenditure we will be able to manage this by making sure that we invest in things that will bring us more money. ?? ?? ?? ?? Omobolanle Salami 19.05.2009 Assignment No. 03 Down 2 U Phone Page 1 ...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

3 star(s)

This essay confuses cash flow with profit and loss. They are different and the reasons for this difference is referred to (seasonal, credit, irregular payments). There should be more discussion of how a business deals with negative cash flow (overdraft, change credit terms etc)

Marked by teacher David Salter 12/02/2012

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. Marked by a teacher

    Business Finance. There are a number of sources of finance, which businesses will need ...

    3 star(s)

    There is no form of security needed in order to borrow the money; this makes it easier to borrow money from family & friends because unlike banks, mortgages etc they don't ask for any forms of security, which is an easier option.

  2. Discuss the Need for Regulation in Financial Reporting

    They are mainly concerned with the accounts of limited liability companies. These Acts state that all financial statements constructed under the Act must present a true and fair view. The Act also deals mainly with minimum disclosure requirements and is foremost concerned with the protection of shareholders and creditors.

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

    In my business I will be getting my revenue by selling the goods to the customers. I will do a product differential. Product differential means that you will check different types of shops which your customer might go to and you check the product that the shop and what the

  2. Cash Flow Problem (Creative Letter)

    Another method of reducing expenditure could be reducing the credit given to your customers, so you can receive the cash quicker and it could improve your cash flow because some businesses are very profitable but they have poor cash flow because of too long a credit given to customers.

  1. Give an explanation of break-even analysis and explain how it supports the achievement of ...

    Break-even analysis is simple to understand and useful-especially in small firms. Businesses can use break-even to: * Estimate the future level of output they will need to produce and sell in order to meet given objectives in terms of profit.

  2. Discuss the need for regulation in financial reporting.

    * The main sources of the regulations which govern the financial reporting of companies in the UK. The prepares of the published financial statements of UK companies must comply with specific rules governing the form and content of company accounts.

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

    To keep the standard consistent large parts of the FRS are based on the act. The need to revise the earlier standard on group accounts arose because of the amendment of the Companies Act in 1989. However, the opportunity was to taken to conduct a thorough review of consolidated financial statements at the same time.

  2. This paper discusses the statement 'in a politically charged rulemaking environment, conceptual frameworks has ...

    Those concepts provide guidance in selecting the transactions, events and circumstances to be accounted for, how the elements (i.e. assets, liability, equity, revenues and expenses) should be recognised, defined and measured, which cost or value should they be measured and how they should be summarised and reported.

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