short term finance - profitability and liquidity

Question 1

profitability and liquidity

Answer 1

having enough cash or assets that easily change to cash to pay amounts falling due

Question 2

factors can mean a company is profitable but

Answer 2

can mean they are not able to pay their way in cash

Question 3

Non-cash expenses

Answer 3

a company is making profit but not money is coming out

Question 4

Accounts receivables

Answer 4

customers that owe the company as company sells on credit (by now save later)

Question 5

Debt obligations

Answer 5

can wear away cash reserves (even if profitable on paper) if large debts/ interest payments to make

Question 6

Capital expenditure

Answer 6

drains cash reserves

Question 7

Cash flow for the period would look BAD if

Answer 7

customers owe the company money (paying credit) even though seems profitable (through the sale)