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A cash-trap business is one where all or most available cash is reinvested directly in the business, leaving little net value for investors. The business may look good, because it appears to have a high net worth, but has little chance of being able to liquidate the business.
An example of a cash-trap business could be a copper mine deep in the South American jungle. While it may look like a viable business, because it might have millions of dollars worth of equipment, it may actually be nearly worthless. If there is no more copper being produced, there is nothing to generate income. Because most of the equipment is very specialized, and expensive to move, there may not be a market for the company. The balance sheet may show significant assets, but if those assets can not be converted to cash, the business just becomes a big hole in the ground full of junk.
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Define cash economy?
In a cash economy all (or most) payments are made in cash - not by cheque, giro or plastic.
Types of cash inflow?
There are a number of types of cash inflow. All of them may or may not be used at any time, depending on the type of business and its activities. The different types are cash flow from operating activities, cash flow from investing activities, and cash flow from financing activities. The cash inflow entries are then divided into total cash flow, net cash flow, free cash flow, and net free cash flow.
What is a cash budget. How it is useful in managerial decision making?
THE CASH BUDGETIn contrast to cash flow statements, cash budgets provide much more timely information regarding cash inflows and outflows. For example, whereas cash flow statements are often prepared on a monthly, quarterly, or annual basis, cash budgets are often prepared on a daily, weekly, or monthly basis. Thus, cash budgets may be said to be prepared on a continuous rolling basis (e.g., are updated every month for the next twelve months). Additionally, cash budgets provide much more detailed information than cash flow statements. For example, cash budgets will typically distinguish between cash collections from credit customers and cash collections from cash customers.A thorough understanding of company operations is necessary to reasonably assure that the nature and timing of cash inflows and outflows is properly reflected in the cash budget. Such an understanding becomes increasingly important as the precision of the cash budget increases. For example, a 360-day rolling budget requires a greater knowledge of a company than a two-month rolling budget.While cash budgets are primarily concerned with operational issues, there may be strategic issues that need to be considered before preparing the cash budget. For example, predetermined cash amounts may be earmarked for the acquisition of certain investments or capital assets, or for the liquidation of certain indebtedness. Further, there may be policy issues that need to be considered prior to preparing a cash budget. For example, should excess cash, if any, be invested in certificates of deposit or in some form of short-term marketable securities (e.g., commercial paper or U.S. Treasury bills)?Generally speaking, the cash budget is grounded in the overall projected cash requirements of a company for a given period. In turn, the overall projected cash requirements are grounded in the overall projected free cash flow. Free cash flow is defined as net cash flow from operations less the following three items:Cash used by essential investing activities (e.g., replacements of critical capital assets).Scheduled repayments of debt.Normal dividend payments.If the calculated amount of free cash flow is positive, this amount represents the cash available to invest in new lines of business, retire additional debt, and/or increase dividends. If the calculated amount of free cash flow is negative, this amount represents the amount of cash that must be borrowed (and/or obtained through sales of nonessential assets, etc.) in order to support the strategic goals of the company. To a large degree, the free cash flow paradigm parallels the cash flow statement.Using the overall projected cash flow requirements of a company (in conjunction with the free cash flow paradigm), detailed budgets are developed for the selected time interval within the overall time horizon of the budget (i.e., the annual budget could be developed on a daily, weekly, or monthly basis). Typically, the complexity of the company's operations will dictate the level of detail required for the cash budget. Similarly, the complexity of the corporate operations will drive the number of assumptions and estimation algorithms required to properly prepare a budget (e.g., credit customers are assumed to remit cash as follows: 50 percent in the month of sale; 30 percent in the month after sale; and so on). Several basic concepts germane to all cash budgets are:Current period beginning cash balances plus current period cash inflows less current period cash outflows equals current period ending cash balances.The current period ending cash balance equals the new (or next) period's beginning cash balance.The current period ending cash balance signals either a cash flow opportunity (e.g., possible investment of idle cash) or a cash flow problem (e.g., the need to borrow cash or adjust one or more of the cash budget items giving rise to the borrow signal).
What is cash inflow and outflow?
Exactly what it sounds like. A cash inflow means that cash is going into the company, and a cash outflow means cash is going out of the company.
What is the main cause of poverty in Morocco?
Morocco is still a cash driven country. Almost all moroccan still use cash for most purchases . The moroccan government does not collect all taxes from all workers which affect the wealth distribution among all people. Most people, especially the older population, keep their cash at home stuffed in mattresses. This dead cash does not circulate among all people causing no jobs in the country.
Where can one read a Johnny Cash biography?
The internet is filled with information on Johnny Cash. The Wikipedia, IMBd and Rolling Stone websites all have biographical information on the singer.
What is the fly trap on die reise?
Its pronounced Der Riese. http:/callofduty.wikia.com/wiki/Fly_Trap Go to this URL and you'll find all the information about the Fly Trap your looking for.
What are the most frequent cash 3 number drawn in Florida?
It is usually 17 and 15, you can find all the necessary information on the Florida Cash 3 website
Difference between petty cash and main cash book?
cash book is the statement which contain's the total cash information . the information includes "cash in hand & cash at bank" petty cash book is maintain by company to meet their daily expenditure
Where can one find more information about cash?
One can find more information about cash through many forms such as a mint where they produce the money(otherwise known as cash). It depends on which aspect of cash your're referring to. Making cash, or just cash in general.
What would be the best thing to do with 100000 mark note?
Answer: invest in a mouse trap. A friend of mine was paid £10,000 cash in notes for a job. He was going on holiday, so put the cash temporarily in the attic to keep it safe from burglars... where the mice promptly ate it all.
Is there a national cash loan company?
If you are looking for more information on Is there a national cash loan company, the best place to look for the information is on www.wegivecash.com/national-cash-advances.aspx
What information is needed in order to prepare a cash budget?
A cash budget begins with the starting cash balance to which cash inflows are added to get cash available.
What cash is the internets equivalent to traditional cash?
A person who gossips or carries tales
How can someone find information on cash insurance?
One can find information on cash insurance on various websites like Insurance and Insure. Both websites offer a great amount of information on insurances, including cash insurances.
Where can you find information on Cash US?
Cash USA is a payday loan website. There are several websites online with information regarding Cash USA such as Consumer Affairs, Cashnetusa and cashusa.
Where can you get information on cash loans?
The best place to get information on cash loans is from the FTC, the Federal Trade Commission. They have a few info sheets about payday and cash loans, and their costs and benefits.
