Question 1: Define 'cash flow' in the context of a business.

Answer: Cash flow is the movement of money into and out of a business, showing how much cash is available at a given time.

Question 2: List three sources of income for a small business.

Answer: Sales revenue, loans, and investments from owners or shareholders.

Question 3: Name three common expenses a business might have.

Answer: Rent, wages, and supplies or raw materials.

Question 4: Explain why it is important for a business to monitor its cash flow regularly.

Answer: Monitoring cash flow helps ensure the business has enough money to pay bills, avoid insolvency, and plan for future expenses or investments.

Question 5: Describe what a positive cash flow and a negative cash flow mean for a business.

Answer: A positive cash flow means more money is coming into the business than going out, which is good for growth. A negative cash flow means more money is leaving than coming in, which could lead to financial difficulties.

Question 6: Sketch a simple cash flow diagram showing income and expenses over a month. Label the inflows and outflows clearly.

Answer: A diagram with a timeline (e.g., days or weeks). Arrows pointing into the timeline labeled 'Income' and arrows pointing out labeled 'Expenses.' The size of arrows can vary to show larger or smaller amounts.

Question 7: Identify two ways a business can improve its cash flow.

Answer: Speeding up customer payments and negotiating better credit terms with suppliers.

Question 8: Imagine a business has a cash flow problem. List three actions they could take to address this issue.

Answer: Reduce unnecessary expenses, increase sales or marketing efforts, and seek short-term financing or a loan.

Question 9: Draw a simple cash flow forecast for a small business for one month. Include expected income and expenses.

Answer: A table or bar chart showing estimated income (e.g., sales) at certain dates and expenses (e.g., rent, wages) at others, with clear labels for each.

Question 10: Explain the difference between gross cash flow and net cash flow.

Answer: Gross cash flow is the total cash received and paid out before deductions, while net cash flow is the difference between total inflows and outflows, showing the actual cash remaining.