IGCSE Business Studies Chapter 52 Cashflow forecasting and working capital

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IGCSE Business Studies: 5.2 Cash-flow forecasting and working capital • Exam technique playlist • • IGCSE Business exam strategies and te... • Time stamps • 00:00 - Intro • 00:13 - Why cash is important to a business • 01:16 - Inflows and outflows • 02:00 - Cash is not profit • 03:00 - Interpreting a cash-flow forecast • 07:22 - Methods to overcome short-term cash flow problems • 08:48 - Working capital • 10:35 - Solved exam question • In this video, I guide you through Chapter 5.2 on cash flow forecasting and working capital. I emphasize the importance of cash, defining it as the most liquid asset, essential for business operations and loan support. Understanding cash flow forecasting is crucial; it involves tracking inflows and outflows, such as sales, debt payments, and expenses. I illustrate that cash is not the same as profit—cash is necessary for survival, akin to water for a fish. A cash flow forecast projects monthly cash movements, allowing businesses to anticipate future needs. • I explain methods to address short-term cash flow problems, including going cash-only to boost inflows and considering bank loans or overdrafts for quick cash. Additionally, I discuss working capital, defined as current assets minus current liabilities. Positive working capital is vital for day-to-day operations, while negative working capital poses risks.

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