Cash Flow
- Created by: bella
- Created on: 06-02-14 12:30
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- Cash Flow
- importance of cash flow
- A business can be profitable even if it runs out of cash.
- If a businesses outflows are greater than its outflow then it could run out of cash and trading will stop.
- Improving Cash outflows
- delay paying invoices
- Leasing rather than buying
- Reduce stock orders
- Improve credit terms with suppliers
- Use cheaper Suppliers
- Lower quality material
- Improving cash inflows
- Increasing sales revenues
- De-stocking
- reduce credit terms with customers
- Encourage customers to pay early
- Deals/incentives
- Loans
- Overdraft
- Poor Cash flow
- Not enough cash in the business to meet its day to day expenses - lack of working capital
- Staff may not get paid on time
- resentment and poor motivation
- Creditors may not get paid on time.
- Stricter terms in the future
- Some may seek legal action
- possible bankruptcy
- importance of cash flow
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