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SingaporeBusiness StudiesQuick questions
Financial Information and Decisions
Quick questions on Cash flow and cash-flow forecasting explained: O-Level Business Studies
5short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is the cash-flow forecast?Show answer
A cash-flow forecast predicts the cash coming in and going out month by month. Its key lines are:
What is cash is not the same as profit?Show answer
Profit is revenue minus costs over a period; cash is the actual money available right now. A firm can make a profit on paper but have no cash - for example if customers have not yet paid, or if it has spent cash buying stock or equipment. Running out of cash, even while profitable, can force a business to close.
What is q1?Show answer
Explain the difference between cash and profit. [2 marks]
What is q2?Show answer
A business has an opening balance of 1,500) this month. Calculate the closing balance. [2 marks]
What is q3?Show answer
Explain one way a business could improve its cash flow if it forecasts a shortage next month. [4 marks]
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