CAMBRIDGE INTERNATIONAL AS & A LEVEL BUSINESS

Topic worksheet 30.1

Cash flow forecasting
Tanvi’s Trinkets (TT) is an independent retailer.
The following estimated information is available:

• Cash sales:
$
September 3 400
October 6 600
November 9 800
December 12 000
January 7 000
February 6 000

• The inventory is bought on one month’s credit, with the following orders:
$
August 1 000
September 1 400
October 2 300
November 2 800
December 1 200
January 1 000
February 2 000

• The staff have wages of $3 000 to be paid at the end of each month.
• Monthly rental of the premises is $2 000.
• The annual heating, lighting and other costs of $2 800 are paid by instalments every three months
(March, June, September, December).
• TT plans to take out a loan in September for $20 000. The loan repayments will be $800 each month starting in
October. The loan will go towards paying for new equipment which is expected to cost $21 500.
The equipment will be bought in September and paid for immediately.
• The bank account balance at 1 September is $4 000.

Cambridge International AS & A Level Business – Chalk & Malpas © Cambridge University Press 2021
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 CAMBRIDGE INTERNATIONAL AS & A LEVEL BUSINESS

1 Complete the cash flow forecast below.

All figures Sep Oct Nov Dec Jan Feb
in $
Cash sales

Loan receipt

Total cash in

Rent

Wages

Trade
payables

Other
expenses

Equipment

Loan
repayment

Total cash
out

NET CASH
FLOW

Opening
balance

Closing
balance

2 In November, the shop window is broken. It costs $800 to repair. This can be claimed on the insurance but will
not be received until January. What will be the impact on TT’s cash flow?
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Cambridge International AS & A Level Business – Chalk & Malpas © Cambridge University Press 2021
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