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Edexcel IGCSE Business Studies 3.2 Cash Flow Forecasting Questions

Practise using cash-flow information to calculate balances, interpret cash shortages and explain why cash matters to business survival.

Syllabus
First assessment 2019
Course
Business Studies 4BS1

Exam points

  • calculate net cash flow or closing balance from inflow, outflow and opening balance data
  • explain how cash affects paying suppliers, wages, overheads and avoiding insolvency
  • evaluate how a cash-flow forecast can inform lending, planning or short-term decisions

Covered syllabus points

3.2.1 Importance of cash to a business3.2.2 Calculating and interpreting cash-flow forecasts

Question 1

[Maximum number: 2]

Outline one reason why cash might be important to Artify Studio.

Question 2

[Maximum number: 2]

In 1985 Emirates started its airline business with just two aircraft. It is now a well-known airline with over 265 aircraft flying to over 180 destinations around the world.

Emirates has won many awards for service and reliability. Until 2016 passengers rated Emirates the leading airline to travel with. However, in 2017 its rating dropped from first to fourth.

Figure 3 shows part of a cash flow forecast for Emirates.

Figure 3

Figure 3

Calculate the net cash flow for June 2017. You are advised to show your working.

billions AED

Question 3

[Maximum number: 8]

One of TADS' objectives is to expand by giving lessons for different musical instruments. To do this it will need to analyse its financial position.

Question (a)

(a)

Figure 1 shows an extract from the cash flow forecast for TADS.

Figure 1

Figure 1

Calculate the closing balance for February. You are advised to show your working.

£

[ 2 ]

Question (b)

(b)

Analyse the importance of cash to TADS.

[ 6 ]
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