Test Your Knowledge - Cash Flow Management

What is the primary purpose of cash flow management?

To ensure the business has enough cash to meet its obligations
To increase profits by cutting expenses
To reduce sales tax liabilities

Which of the following is an example of a cash inflow?

Loan repayment
Receiving payment from customers
Paying wages to employees

Which financial statement reflects a company’s cash flow activities?

Balance Sheet
Income Statement
Cash Flow Statement

What is a cash flow forecast?

A projection of a company's cash inflows and outflows over a future period
A statement of actual cash inflows and outflows
A detailed breakdown of monthly expenses

What does a negative cash flow indicate?

The company is making a profit
The company has more cash coming in than going out
The company is spending more cash than it is receiving

Which of the following is a key factor in maintaining a healthy cash flow?

Minimizing debt
Generating consistent revenue and controlling expenses
Paying taxes in advance

Which of the following can be a cause of poor cash flow management?

Delay in customer payments
Increasing sales
High employee retention rates

Which cash flow activity is included in operating activities?

Purchasing fixed assets
Paying off a bank loan
Collecting payments from customers

How can a business improve its cash flow?

By increasing the number of credit sales
By reducing accounts payable
By shortening the payment terms for customers

What does the cash flow cycle measure?

The time it takes for a company to convert its investments into cash
The length of time a company holds inventory before selling it
The time taken to pay creditors

Test Your Knowledge - You have 10 questions!