annual cash flow forecast

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Omobolanle Salami                23.04.2009

Assignment No. 03

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)

In my opinion i think a cash flow is the balance of amount being recived and paid by a business during a period of time. A cash flow statement is a statement that shows  a business cash flow, what means it shows the money that is coming in and out what is called cash flow in- and outflows. This statement shows the changes in balance and income. A cash flow forecast is a business cash flow over a specific time what means is the change in cash frome one period to the next period.

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Task 1 b

Our cash flow is showing us that we had a positive cash flow from september till january because of the christmas sales and from february till may we have a negative cash flow, but from june till  august we have a positive cash flow because of the summer sales.

Positive cash flow: For a positive cash flow, the inflwos must be grater than the outflows

Negative cash flow: is when the outflows are greater than the inflows.

Task 2 a

December and January was the month with regular inflows and outflows because during this time our ...

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