5.5 Cash and Cash Flow

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• Computing
• Upper Secondary (Key Stage 4)
• GCSE

5.5 Cash and Cash Flow

Why is cash important to a business?

What is the difference between cash and profit?

What cash do you have flow into (inflows) your account?

What cash do you have flow out of (outflow) your account?

What is the difference between cash and profit?

What are the main cash outflows of a business?

Why is it important to forecast cashflow?

January Inflows = £500 January Outflows = £250 Net Cash Flow = ??

A

£250

B

-£250

C

£500

D

£100

April Inflows = £1000 April Outflows = £250 April Net Cash Flow = ??

A

£550

B

-£450

C

£750

D

£1000

March Inflows = £500 March Outflows = £500 March Net Cash Flow = ??

A

£250

B

-£500

C

£500

D

£0

March Inflows = £500 March Outflows = £1500 March Net Cash Flow = ??

A

-£1000

B

-£500

C

£250

D

£0

February Opening Balance = £500 February Net cash flow = £1500 February Closing Balance = ??

A

£1250

B

-£500

C

-£1000

D

£2000

January Opening Balance = £250 January Net cash flow = -£1000 January Closing Balance = ??

A

£1250

B

-£750

C

-£1000

D

£2000

January Closing Balance = £1000 February Opening Balance = ??

A

£1250

B

-£750

C

-£1000

D

£1000

Lets look at some failed businesses

1. Research each of the failed businesses on your sheet

2. Find out what they used to do and why they failed.