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Business Studies IGCSEPDF 23
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● Cash:
Money available to pay expenses immediately — includes coins, banknotes, and
bank deposits.
● Cash flow:
The movement of money into and out of a business.
● Cash inflow:
Money received by the business (e.g. sales revenue, loans, investments).
● Cash outflow:
Money paid out by the business (e.g. wages, rent, purchases).
● Net cash flow:
The difference between cash inflows and outflows.
Formula:
Net cash flow = Cash inflows − Cash outflows
Cashflow forecast:
An estimate of future cash inflows and outflows over a period.
Opening balance:
The amount of cash available at the start of a period.
Closing balance:
The amount of cash left at the end of a period.
Formula:
Closing balance = Opening balance + Net cash flow
Profit:
The financial gain made when revenue is greater than costs.
Revenue (sales turnover):
The total income received from selling goods and services.
Formula:
Revenue = Selling price × Quantity sold
Costs:
The expenses incurred in producing and selling goods or services.
Fixed costs:
Costs that do not change with output (e.g. rent, insurance).
Variable costs:
Costs that change directly with output (e.g. raw materials, wages).
Total cost:
The sum of fixed and variable costs.
Formula:
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