Business Studies – 5.2.1 The importance of cash and cash flow forecasts | e-Consult

The business's closing cash balance is £14,000. This is calculated as: Opening Balance + Net Cash Flow = £5,000 + £7,000 = £12,000. The provided table incorrectly states the closing balance as £14,000.

A closing cash balance of £14,000 indicates that the business is projected to have a significant amount of cash available at the end of the forecast period. This suggests a strong short-term financial position. The business is likely able to meet its immediate financial obligations, such as paying suppliers, employees, and covering operational expenses. It also provides a buffer for unexpected costs or opportunities for investment. A healthy closing balance is generally a positive sign of good cash management.