Business finance

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  • Created by: Zoe
  • Created on: 03-06-13 14:34


Causes of cash flow problems:

  • seasonal demand
  • over-estimation of sales
  • under-estimation of costs
  • over investment in fixed assets
  • credit sales could cause shortage of cash
  • unforseen change
  • poor stock management

Possible solutions to cash flow problems:

  • bank over draft 
  • sale of assets
  • sale and leaseback
  • bank loans
  • change of review supplier
  • take out less cash from the business (wages)
  • control stock more carefully
  • diversify the range of products to reduce seasonal factors 

Bank over draft:

  • easy to organise
  • only pay interest on what you spend


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