Show model answer and explanation
-300
500+1000−1800.
A Level · English Medium · Pearson Edexcel · Business studies
Finance, costs and cash flow
Test cash timing before interpreting a profitable plan.
Original Kidemy further-topic investigation. This optional lesson is shared by related upper pathways; select suitable depth with a teacher. It does not certify complete grade or board coverage.
Learn the idea
A plan can show profit while running short of cash before fees arrive. Track opening cash, actual receipts and payments by period. A sensitivity case changes a stated assumption rather than simply labelling a forecast pessimistic.
Worked example
Opening cash500; month-one receipts1000 and payments1800 give−300. Month-two receipts2000 and payments800 give900 after carrying forward−300. The later positive balance does not remove the earlier funding gap.
- State receipt timing.
- Carry balances forward.
- Identify the first shortage and a conditional response.
Your written practice
Show your working on paper and enter your answer here. If it does not match, compare the model and try again.
Show model answer and explanation
900
−300+2000−800.
Show model answer and explanation
800
1000×0.8.
Write in your own words. A guardian or teacher should review this response.
Show model answer and explanation
Bills fall due before the later receipts, so the business needs an authorised funding or timing response.
Explain chronology.
Write in your own words. A guardian or teacher should review this response.
Show model answer and explanation
Model some fees arriving a month late and recalculate each closing balance.
Change a clear assumption and compare outcomes.
Apply the idea
Prepare a three-month fictional cash forecast with a late-receipt case.
Review with a guardian or teacher
- Use the stated evidence or givens.
- Show reasoning rather than only a result.
- Review and explain one correction.
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