1.3.3 Cash and cash-flow

• Cash represents a static snapshot of liquid assets, while cash flow tracks the dynamic movement of money over time.


  True
• Match the benefit of cash flow management with its description:

  Maintain Liquidity ↔️ Covers daily expenses

  Avoid Debt ↔️ Reduces reliance on loans

  Plan for Investments ↔️ Allows strategic growth

  Attract Investors ↔️ Shows financial stability
• The components of cash flow are inflows and outflows
• Match the aspect with its correct description for cash and profit:

  Definition of Cash ↔️ Liquid assets at a specific time

  Definition of Profit ↔️ Revenue minus expenses over a period

  Timing of Cash ↔️ Snapshot in time

  Timing of Profit ↔️ Calculated over an accounting period
• The cash flow cycle describes the sequence of activities a business goes through to convert its cash into products or services and back into cash.


  True
• The first stage of the cash flow cycle is cash outlay
• Match the aspect with its type:

  Cash ↔️ Static

  Cash Flow ↔️ Dynamic
• Effective cash flow management allows businesses to plan for long-term growth.

  True
• Match the aspect with its timing:

  Cash ↔️ Snapshot in time

  Profit ↔️ Accounting period
• Increasing sales can boost cash inflows
• Monitoring cash flow is essential for assessing a company's financial health.


  True
• Analyzing cash inflows and outflows helps identify areas for improvement
• Identifying problem areas is a key use of cash flow information.


  True
• Match the external factor with its impact on cash flow:

  Economic Conditions ↔️ Reduced customer demand

  Government Policies ↔️ Changes in interest rates

  Market Competition ↔️ Discounts or extended credit
• Match the aspect with its description for cash or cash flow:

  Cash ↔️ Liquid assets at a specific time

  Cash Flow ↔️ Movement of money in and out
• Effective cash flow management ensures enough money is available to meet financial obligations
• Planning for investments enables strategic investments for future growth
• Match the aspect with its description for cash or profit:

  Cash ↔️ Ensures short-term liquidity

  Profit ↔️ Indicates long-term business performance
• What is the definition of cash in business terms?

  Liquid assets at a time
• Why is cash important for a business?

  Ensures short-term liquidity
• Describe the stages of the cash flow cycle.

  1️⃣ Cash Outlay

  2️⃣ Production

  3️⃣ Sales

  4️⃣ Cash Inflow
• What are key methods for managing cash flow?

  Increase sales, reduce expenses
• What does cash refer to in business terms?

  Liquid assets
• List the key benefits of effective cash flow management.

  1️⃣ Maintaining Liquidity

  2️⃣ Avoiding Debt

  3️⃣ Planning for Investments

  4️⃣ Attracting Investors
• What is the definition of cash flow?

  Movement of money
• What is one benefit of maintaining liquidity through effective cash flow management?

  Cover day-to-day expenses
• What is the importance of profit in business?

  Long-term performance
• Arrange the stages of the cash flow cycle in the correct order.

  1️⃣ Cash Outlay

  2️⃣ Production

  3️⃣ Sales

  4️⃣ Cash Inflow
• Stages of the cash flow cycle in order

  1️⃣ Cash Outlay

  2️⃣ Production

  3️⃣ Sales

  4️⃣ Cash Inflow
• Why is effective cash flow management crucial for businesses?

  Meets financial obligations
• What is the definition of cash in business terms?

  Liquid assets at a time
• Stages of the cash flow cycle in order

  1️⃣ Cash Outlay

  2️⃣ Production

  3️⃣ Sales

  4️⃣ Cash Inflow
• What are the two main categories of cash flow sources?

  Inflows and outflows
• Revenue from sales is considered a cash inflow
• What is one main use of cash flow information for businesses?

  Planning and budgeting
• What does demonstrating a healthy cash flow help a business secure?

  Financing
• How do recessions or downturns typically affect cash inflows?

  They reduce customer demand
• What does cash represent in a business?

  A static snapshot
• What is one key benefit of maintaining liquidity through cash flow management?

  Covers daily expenses
• What does attracting investors demonstrate about a business?

  Financial stability