Business finance
- Created by: Zoe
- Created on: 03-06-13 14:34
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Finance
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:
Advantages
- easy to organise
- only pay interest on what you spend…
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