Cash Flow forecasting
RETRIEVAL STARTER

EXPLAIN THE DIFFERENCE BETWEEN A VARIABLE AND FIXED COST?

IDENTIFY TWO FIXED COST AND TWO VARIABLE COST AT:

ST BONNAVENTURES

TESCO SUPERMARKET
CHALLENGE

A GREENGROCER BUYS PUNNETS OF STRAWBERRIES FOR 50p AND SELLS THEM
FOR £1. SHE MUST ALSO PAY £120 IN WEEKLY RENT AND £180 FOR OTHER
FIXED COST.

WHAT IS THE TOTAL COST OF SELLING 500 PUNNETS PER WEEK?

WHAT IS THE TOTAL COST OF SELLING 1,000 PUNNETS PER WEEK?
DEFINITION PAIR TASK
PROFIT
INVOICE
the money you have left after paying for business expenses.
a company receives in its day-to-day business operations
INSOLVENT
a decrease in net income that is outside the normal operations
of the business.
CASH-FLOW
a payment with either cash or credit to purchase goods or
services.
EXPENDITURE
company can't pay its debts.
REVENUE
a document issued by a seller to the buyer that indicates the
quantities and costs of the products or services provider by the
seller.
LOSS
a measurement of the amount of cash that comes into and out of
your business in a particular period of time.
DEFINITION PAIR TASK
PROFIT
INVOICE
the money you have left after paying for business expenses.
a company receives in its day-to-day business operations
INSOLVENT
a decrease in net income that is outside the normal operations
of the business.
CASH-FLOW
a payment with either cash or credit to purchase goods or
services.
EXPENDITURE
company can't pay its debts.
REVENUE
a document issued by a seller to the buyer that indicates the
quantities and costs of the products or services provider by the
seller.
LOSS
a measurement of the amount of cash that comes into and out of
your business in a particular period of time.
MONTHS
JANUARY
FEBUARY
MARCH
TOTAL
PUT THE FOLLOWING HEADINGS INTO
CATEGORIES (CASH INFLOW & CASH
OUTFLOW)
Income tax, VAT & Corporation tax
Cash Sales
Buying equipment
Repayment on loans
Sale of spare assets
Receipt of bank loan
Payment of wages & salaries
Government grants
Payment of dividends
Interest on bank loan or overdraft
Payment of leasing or hire purchase rentals
Receipts from trade customers
Payment of suppliers (raw materials, stock)
Personal funds
Investment of share capital
Receipts from factoring
CASH INFLOWS AND OUTFLOWS
(WHAT IT SHOULD LOOK LIKE)
Cash Flow Activity
Who can be first to work it out……..?!?!
There is a concert in two weeks time and you really want
to go…
• Tickets cost £65 and has to be paid before the concert
• Your mum gives you £20
• You worked 7 hours at a restaurant for £4.50 per hour
• You find a £10 note in an old pair of jeans
• Your gran has promised you £30 for your birthday the
week after the concert
• BUT you already owe your best friend £26 that he needs
ASAP
Can you afford to go to the concert? What could you
arrange to do to be able to afford the ticket?
Cash Flow Activity Answers
7hour * 4.5= 31.50
Mum £20
£10
£61.50
You owe £26 so this comes to £35.50
£30 after concert
With your grans money, you will have £65.50
Explain how this task is going to relate to everyday life?
28/11/2022 14:37
Activate
Cash Flow
Forecasting
Title: Cash Flow Forecasting
LO: To understand the importance of cash flow for a
business
Success Criteria
 I can define cash flow forecasting (SC1)
 I can understand how to calculate cash flow (SC2)
 I can recommend how to improve cash flow for a
business (SC3)
SC1
SC2
SC3
Inflow vs Outflow
Create the following table in your books and
identify how cash can come in or how cash can
come out?
Cash Inflow
Cash Outflow
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Inflow vs Outflow
Cash Inflow
•
•
•
•
Sales
Bank Loan
Grants
Interest
Cash Outflow
•
•
•
•
•
•
Wages
Stock
Utility bills
Advertising
Payback of loans
Interest
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Cash Flow Forecast
Look at the task sheet provided and looking at the answers
already provided, write down what the calculation would be
for the following:

Total Inflow

Total Outflow

Net Cash Flow

Opening Balance

Closing Balance
Clue: If the number is in a bracket, it is a negative figure!
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Calculations

Total inflow = All inflows added up for that month

Total outflow = All outflows added up for that month

Net Cash Flow = Total Inflows – Total Outflows

Opening Balance = Closing Balance from the month
before

Closing Balance = Net Cash Flow + Opening Balance
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Missing Figures
Now that you know the calculations,
attempt to complete the rest of the
missing figures
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70,000
150,000
120,000
130,000
135,000
130,000
40,000
50,000
(65,000)
20,000
80,000
80,000
(80,000)
(60,000)
20,000
20,000
100,000
(80,000)
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(60,000)
Now that you know have completed a cash flow forecast,
now it is time to explain what it is showing

Define cash flow based on what you have calculated?

What is a forecast?
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Interpret…
Looking at the cash flow forecast that you have created,
explain:

Why the business is doing well?

Why the business may be performing badly?
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Recommend…

Identify and explain how this business
could improve it’s cash flow

Explain why this would help?

What do you need to consider with each
recommendation?
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Possible recommendations…
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28/11/2022 14:37
Activate
Rights of the
individuals
Title: Cash Flow Forecasting
LO: To understand the importance of cash flow for a
business
Success Criteria
 I can define cash flow forecasting (SC1)
 I can understand how to calculate cash flow (SC2)
 I can recommend how to improve cash flow for a
business (SC3)
SC1
SC2
SC3
Sit down = True
= False

Sales Revenue is an outflow

Wages are an outflow

Net Cash Flow = Inflow + Outflow

Closing balance is what you start with at
the beginning of the month

Interest is an inflow
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