3.6.2 - Cash flow GapFill

A cash flow forecast is a prediction of the future flows of cash into and out of a business.         

A cash flow forecast is a report that shows the   driven expected late unexpected  movement of cash into and out of a business during a period of time, which is usually a year.  The cash flow forecast should be included as part of a business   show decision eventplan .

Cash is important as it will be needed in a business to pay   shareholderssuppliersdebtors stakeholders .  If a supplier is not paid on time, they may refuse to supply the business with goods or stock in the future.

Cash may also be used to pay the expenses or   revenues underheads overheads turnover of the business.  These are costs that do not directly contribute to making the product or performing the service.  Examples of overheads are    working playing singing advertising and administration costs.

Cash may also be used to pay the staff their   profits costs losses wages.  If staff are not paid on time, they may leave the business, which may mean the business will incur more costs by having to   lure fire dismiss recruit new staff.  The staff may also decide to take union or legal action against the business.

“Cash is King” is an expression some business people may use.  This is a way of showing how important it is.  If a business has a   great positive negative superb cash flow over time, it may fail or become insolvent .

There is a   difference worry energy profit between cash and profit.  Profit is recorded in the business accounts at the moment of the sale.  However, cash is only recorded when payment is made.  For example, some businesses will give 30 days'  credit costs debit profit to their customers.  This means that cash is not recorded until it is received, which, in this example, is 30 days after the profit is recorded.