Lesson Plan Business Studies (ICE)

Course Title: Business Studies

Lesson Title: Cash flow forecasting
Instructor: Faiza Murtaza Faiz

Lesson Goal: To understand the importance and classification of cash flow in a business.
Construct, Interpret and amend the forecasted cash flow.

Learning Objectives:
 The importance of cash to a business.
 What is cash flow forecast and why it is important?
 How cash flow forecast is constructed and how to interpret and amend it?
 How firms can run short of cash and its likely consequences?
 How short term and long term cash flow problems can be overcome?

Specific Learning Objectives:

Time Learning Objectives
Defining Cash flow (inflow and outflow) in detail, identifying links with debtors
5 min
and creditors.
Emphasizing the importance of cash flow management for running a business
3 min
successfully.
5 min Explanation and construction of cash flow cycle.
2 min Clearing the concept for “how cash flow differentiates from profit”.
Constructing cash flow forecast of four months, identifying the usual cash inflow
15 min
and out flows.
Calculation of:
 Cash inflow
5 min  Cash outflow
 Net Cash Flow = Total Cash Inflow – Total Cash Outflow
 Closing cash/bank balance
3 min Uses of cash flow forecasting in setting up a business and applying for loan.
Identifying the ways to manage cash flow problems;
 Increase bank loans
 Delay payment to suppliers
 Ask debtors to pay more quickly
5 min  Delay/ cancel capital equipment purchases
 Attract more investors
 Cutting costs
 Attracting more investors

1
Lesson Plan Business Studies (ICE)

Assessment and Evaluation

Time
3 min Student should identify few of the accounts as either cash inflow or outflow.
10 min Attempt Past paper question.

Discussion and introduction to next topic

Time
3 min Explaining the unresolved queries with answers to the assessment with due
appreciation to the student.
1 min Briefly introducing the next topic of working capital and income statement.

Resources
Presentation Slides on PowerPoint

Excel sheets to construct Cash flow forecasts

Past paper (May/June 2021): Paper 1, Question 2 (partial)