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500
800+2200−2500 = 500.
Class 10 · English Version · Business studies
Finance, costs and cash flow
Prepare a cash forecast and distinguish revenue, profit and cash flow.
Shared cross-level core and stretch unit. Start with the core questions, then use the stretch example for deeper work. The same unit is available in related class and board pathways; it is not a full grade-specific or examination-specification course. A teacher should select the appropriate depth and further topics.
Learn the idea
Revenue is earned income under the stated basis; profit deducts relevant expenses; cash flow records actual cash movements. Credit terms and advance receipts change timing. A forecast is an assumption-based plan, not a guarantee. Review balances month by month so a later surplus does not hide an earlier shortage.
Worked example
Opening cash 1000 + receipts 3000 − payments 3500 = closing cash 500. A sale on credit can increase revenue without that period’s cash receipt.
- State timing assumptions.
- Calculate receipts, payments and closing cash.
- Test a plausible downside case.
Stretch example
Discounted cash flow compares future cash at a stated discount rate: present value = future cash/(1+r)^t. It is sensitive to assumptions about timing, risk and future amounts; it does not determine a certain investment value.
Your written practice
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40
100−60 = 40.
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no
It is financing and creates a liability.
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Revenue may be earned on credit while the business pays expenses or buys equipment now.
Give a timing mechanism.
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Lower receipts may expose a cash shortage hidden by the main assumptions.
Explain the purpose of sensitivity analysis in plain language.
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1000
1100/1.1 = 1000.
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Different justified assumptions can materially change the present value.
Explain sensitivity rather than claiming one certain value.
Three-month cash plan
Prepare a fictional service forecast with one downside case.
Review with a guardian or teacher
- Separate earned revenue from receipts.
- Carry each closing balance forward.
- Explain a shortage and one feasible response.
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