5.4a - Improving Cash Flow Flashcards
1
Q
Why do businesses need profit in the long-term?
A
- Attract investors
- Expand
- Develop new products
2
Q
Why do businesses need profit in the short-term?
A
- Pay workers
- Pay shareholders
- Buy stock
- Pay bills
3
Q
How can cash flow issues be improved?
A
- Having a reliable cash flow forecasting system
- Actively managing working capital
- Choosing the right source of finance
4
Q
What makes a good cash flow forecast?
A
- It is updated regularly
- It makes sensible assumptions
- It allows for unexpected changes
5
Q
What does working capital management focus on?
A
- Customers paying on time
- Having an appropriate level of stock
- Getting maximum credit from suppliers
