Karteikarten
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- 1What does cash-flow mean?The movement of money into and out of a business
- 2What does a cash-flow forecast show?A cash-flow forecast shows the expected cash coming into a business (receipts, cash inflows), the expected cash going out of a business (payments, cash outflows) and the estimated (opening and closing) bank balance, usually on a month by month basis over a period of 6 to 12 months.
- 3What is the benefits of buying all of the T-shirts in the first month (June) ?It will allow BMF Ltd to know, how much they need to make up for the amount they have already invested into it.
- 4What are the benefits of having a cash-flow forecast?Assess the business’s ability to meet debts as they fall due (ie its solvency or liquidity position)
Identify any imminent cash-flow problems;
Plan and seek ways - well in advance - to prevent a potential cash shortage - 5What are the disadvantages of using a cash-flow forecast?It does not show you how much profit you will make. And you will have to make a new one, if there is a change in expenditure or income.
- 6What will the total revenue, cost and profit of the 2017 Festival T-shirts be, if BMF Ltd continues to use the Chinese supplier?Revenue in June: 600 x £10 = £6,000 Revenue in July: 1,400 x £10 = £14,000
Revenue in August: 2,800 x £10 = £28,000
Revenue in September: 200 x £5 = £1,000
Total revenue will be: £49,000 - 7What will be the overall cost of T-shirts for BMF Ltd?The total cost to buy the T-shirts from the Chinese supplier is calculated as follows: quantity purchased x cost per unit. Therefore:
Total cost will be: 5,000 x £5 = £25,000 - 8How much profit will BMF make? (Profit = Revenue - Cost)Profit will be: £24,000
Revenue = £49,000 and Cost = £25,000
£49,000 - £25,000 = £24,000 - 9How do you calculate Gross Profit? Gross Profit = Revenue – cost of sales (or ‘variable costs’ or ‘direct costs’).
- 10How do you calculate Net Profit?Net Profit = Gross profit – other (business) expenses (or ‘fixed costs’ or ‘indirect costs’ or overheads), which is also known as trading or operating profit.
- 11How much money will BMF Ltd spend on Retail and Distribution Costs?£8,400 for ‘Retail and distribution’ (£1,200 + £2,800 + £4,000 + £400)
- 12How much money will BMF Ltd spend on Administration?£4,600 for ‘Administration’ (£700 + £1,500 + £2,100 + £300).
- 13How much money will be spent, other than the T-shirts?This equates to £13,000 and if we deduct these other costs from the £24,000 profit figure calculate above, this would result in a figure for profit of £11,000. This figure might be classed as net profit.
- 14On the cash-flow forecast, what does "balance brought forward" mean?The amount of cash available at the beginning of each month of the 4 months shown
- 15On the cash-flow forecast, what does "balance carried forward" mean?The amount of cash left at the end of each month. This is carried forward as the ‘Balance brought forward’ at the beginning of the next month.
- 16How does producing a cash-flow forecast help BMF Ltd?To make key business decisions, for example, whether or not to: expand or reduce existing Festival activities; include new goods / services / activities at The Festival; or invest in new / additional resources / facilities. This is because it would highlight potential cash flow problems arising from such decisions / activities that could put the business at risk.
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- Karteikarten am Ohne Titel, erstellt von Harry Raj am 20/03/2017.
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- Harry Raj
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