Business 7115 · O Level · Cash-flow forecasting and working capital
Cash-flow forecasting and working capital — practice question
OTK is a small jewellery store in the middle of Main City. It does not yet make use of ecommerce. OTK purchases its jewellery from local suppliers, and payment is made 30 days later. The shop manager is reviewing OTK’s cash flow forecast and is worried that the business could face a short-term cash flow issue.
(a)[2]
Define what is meant by ‘cash flow forecast’.
(b)[2]
Identify two reasons why cash is important for a business.
(c)[4]
Identify four functions of management.
(d)[6]
Explain two ways OTK could deal with a short-term cash flow problem.
(e)[6]
Explain two threats to a business of using ecommerce. Which threat is most likely to matter most? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Prediction of a business’s future cash inflows and outflows (usually on a month-by-month basis)” …