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Business GCES OCR

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  1. Business-Enterprise-And-Entrepreneurship ocr
    2 主题
  2. Business-Planning ocr
    2 主题
  3. Business-Ownership ocr
    4 主题
  4. Business-Aims-And-Objectives ocr
    1 主题
  5. Stakeholders-In-Business ocr
    2 主题
  6. Business-Growth ocr
    1 主题
  7. The-Role-Of-Marketing ocr
    1 主题
  8. Market-Research ocr
    5 主题
  9. Market-Segmentation ocr
    1 主题
  10. The-Marketing-Mix ocr
    12 主题
  11. The-Role-Of-Human-Resources ocr
    1 主题
  12. Organisational-Structures ocr
    2 主题
  13. Different-Ways-Of-Working ocr
    1 主题
  14. Communication-In-Business ocr
    3 主题
  15. Recruitment-And-Selection ocr
    3 主题
  16. Motivation-And-Retention ocr
    1 主题
  17. Training-And-Development ocr
    2 主题
  18. Employment-Law ocr
    1 主题
  19. Production-Processes ocr
    2 主题
  20. Quality-Of-Goods-And-Services ocr
    1 主题
  21. The-Sales-Process-And-Customer-Service ocr
    2 主题
  22. Consumer-Law ocr
    1 主题
  23. Business-Location ocr
    1 主题
  24. Working-With-Suppliers ocr
    1 主题
  25. The-Role-Of-Finance ocr
    1 主题
  26. Sources-Of-Finance ocr
    2 主题
  27. Revenue-Costs-Profit-And-Loss ocr
    4 主题
  28. Break-Even ocr
    2 主题
  29. Cash-And-Cash-Flow ocr
    2 主题
  30. Ethical-And-Environmental-Considerations ocr
    2 主题
  31. The-Economic-Climate ocr
    1 主题
  32. Globalisation ocr
    3 主题
  33. Interdependence-Of-Business-Functions ocr
    1 主题
  34. The-Impact-Of-Risk-And-Reward-On-Business-Activity ocr
    1 主题
  35. Financial-Information-And-Business-Performance ocr
    1 主题
  36. Paper-1-Business-Activity-Marketing-And-People ocr
    2 主题
  37. Paper-2-Operations-Finance-And-Influences-On-Business ocr
    2 主题
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Exam code:J204

Completing cash flow forecasts

  • A cash flow forecast is a prediction of the anticipated cash inflows and outflows, usually for a six- to twelve-month period

  • The cash flow forecast:

    • Compiles expected cash inflows and cash outflows, month by month,

    • Takes into account cash present at the beginning of the period

    • Determines the cash flow position at the end of each month over a period of time

Net Cash Flow equals Cash Inflows minus Cash Outflows. Inflows: sales revenue, assets, interest. Outflows: wages, supplier invoices, loans.
Net cash flow is calculated by subtracting cash outflows from cash inflows during a given period of time

Term

Explanation

Cash inflows

  • Cash inflows include income from sales, loan sums received from the bank, interest received or capital injected into a business by owners

Cash outflows

  • Cash outflows include payments for stock, staff wages and salaries, rent and utility bills and repayments of bank loans

Opening balance

  • The opening balance is the cash position at the beginning of each month

  • In the first month, this is usually:

    • Cash carried forward from any earlier trading

    • Cash introduced by the owner or from loans received

  • In later months, the opening balance is the closing balance carried forward from the previous month

Net cash flow

  • The net cash flow is the difference between cash inflows and cash outflows during a month

Closing balance

  • The closing balance is the sum of the month’s net cash flow and the opening balance

  • It is calculated using the formula:

Closing space balance space equals space Net space cash space flow space plus space Opening space balance

Completing a cash flow forecast

  • Although the layout can vary, a typical cash flow forecast can be constructed in the following way:

Step 1: Calculate total cash inflows

Table showing cash inflows for March (€10,500), April (€4,800), and May (€5,300) from sales and capital introduced.

Explanation

  • In this instance, the business expects to receive cash inflows from sales in March, April and May

  • Owners’ capital of €6,000 will be introduced in March

  • The total for each month is calculated by adding cash from sales to capital introduced

Step 2: Calculate total cash outflows

Table of monthly cash outflows, comparing rent, stock, wages, and utilities for March to May. Total outflows: €10,760, €4,560, €4,780 respectively.

Explanation

  • In this instance, the business expects to pay rent of €1,400 in March, April and May

  • It will purchase a significant amount of stock in March, with smaller amounts in April and May

  • Wages are expected to be €2,100 in each month

  • Utilities of €460 will be paid in March and April, increasing to €480 in May

  • Total cash outflows each month is calculated by adding these together

Step 3: Calculate net cash flows

  • The net cash flow is calculated by subtracting total cash outflows from total cash inflows

<img alt=”Cash flow table for March, April, May. Inflows: €10,500, €4,800, €5,300. Outflows: €10,760, €4,560, €4,780. Net flow: -€260, €240, €520.” class=”ContentBlock_figure__vJw2q” data-nimg=”1″ decoding=”async” height=”429″ sizes=”(max-width: 320px) 320w, (max-width: 640px) 640w, (max-width: 960px) 960w, (max-width: 1280px) 1280w, 1920w” src=”https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=3840/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png” srcset=”https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=16/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png 16w, https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=32/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png 32w, https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=48/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png 48w, https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=64/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png 64w, https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=96/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png 96w, https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=128/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png 128w, https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=256/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png 256w, https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=384/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png 384w, https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=640/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png 640w, https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=750/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png 750w, https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=828/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png 828w, https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=1080/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png 1080w, https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=1200/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png 1200w, https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=1920/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net-cash-flow.png 1920w, https://cdn.savemyexams.com/cdn-cgi/image/f=auto,width=2048/https://cdn.savemyexams.com/uploads/2025/06/15495_httpscdn-savemyexams-comuploads20240525592-ocr-gcse-business-net

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