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1.13   cash flow forecasting - moodle
1.13   cash flow forecasting - moodle
1.13   cash flow forecasting - moodle
1.13   cash flow forecasting - moodle
1.13   cash flow forecasting - moodle
1.13   cash flow forecasting - moodle
1.13   cash flow forecasting - moodle
1.13   cash flow forecasting - moodle
1.13   cash flow forecasting - moodle
1.13   cash flow forecasting - moodle
1.13   cash flow forecasting - moodle
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1.13 cash flow forecasting - moodle

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AS Business Resources

AS Business Resources

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  • 1. Do Now!Play the Ice-CreamCash Flow game! 10 minutes
  • 2. Cash Flow Forecasting
  • 3. Learning ObjectivesBy the end of this lesson you should be able to:1. Explain what cash flow means.2. Understand the nature and importance of cash flow to business start-up.3. Structure a cash flow forecast and understand the sources of information needed for this.4. Measure cash flow within a business.
  • 4. What does ‘cash flow’ mean? Cash flow – is the flow of money in and out of the business. Cash! Gives ‘immediate spending power’. Needed to pay bills and expenses such as rent, taxes, wages, suppliers etc. Without enough cash in the business, bills cannot be paid and the firm will be forced out of business.LO1 Explain what cash flow means.
  • 5. Why is cash flow so important? Importance! Cash is always important – both long and short-term. Cash flow relates to timings of payments to workers and suppliers and receipts from customers. Essential! Time management of payments/ receipts carefully. Monitoring of the cash flow. Pay on suppliers and creditors on time. Don’t be forced into insolvency or liquidation!LO2 Understand the nature and importance of cash flow to business start-up.
  • 6. How to forecast cash flow Gemma is an entrepreneur looking to open a sandwich shop in Manchester. As part of her business plan and to help secure future loans etc, Gemma needs to provide a cash flow forecast to the bank manager. What cash inflow and outflows do you think she will need to consider? Team 1 Team 2 List all the possible List all the possible cash-inflows for the cash-outflows for the business. business.LO3 Structure a cash flow forecast and understand the sources of information needed for this.
  • 7. How to forecast cash flow Gemma is an entrepreneur looking to open a sandwich shop in Manchester. As part of her business plan and to help secure future loans etc, Gemma needs to provide a cash flow forecast to the bank manager. What cash inflow and outflows do you think she will need to consider? Cash-inflows Cash-outflows 1. Owners capital injection. 1. Rental for premises. 2. Bank loans received. 2. Fixed costs - electricity, gas, 3. Customer cash purchases. water, electricity, phone bill. 4. Debtors – people who owe 3. Labour costs you money. 4. Variable costs – food/ stock 5. Creditors – people you owe money to.LO3 Structure a cash flow forecast and understand the sources of informationneeded for this.
  • 8. What is a cash-flow forecasting and how does it work?Cash Inflow –Money coming in DEFINE: Cash-Flow Cash Outflow – Money going out Opening Balance (1) 1. What is the – what is left from purpose? Net Cash-flow – the previous month/ Difference between year inflows and outflows 2. What is this showing us? 3. How does it help businesses? Opening Balance (2) – Closing Closing Balance – Add balance from previous month is opening and net cash carried over.
  • 9. Over to you! Cash Flow Forecasting - Tasty Cakes LTD 1. Complete the cash-flow forecast. 2. Answer the supporting questions.LO4 Measure cash flow within a business.
  • 10. Finally….Write down 3 examples of acash-outflows.Write down 2 examples ofcash inflows.Write down 1 definition forcash-flow.
  • 11. Learning ObjectivesYou should now be able to:1. Explain what cash flow means.2. Understand the nature and importance of cash flow to a business start-up.3. Structure a cash flow forecast and understand the sources of information needed for this.4. Measure cash flow within a business.

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