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1) Overtrading.
2) Poor debtor collection policy and or relaxed debtor screening process. (Bulk of sales are on credit)
3) Purchase of Investment/ Fixed assets during the financial year.
4) Redemption of debt funds, e.g. Debentures and bank loan.
5) Redemption of Equity funds, e.g. Preference share capital.
6) large financial burden ( the need to service high interest)
7) Credit period not made use of. (Repay creditors too quickly / Cash purchases instead of Credit purchases)
8) Prepayments during the year.
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What does one do to make a cash flow forecast?
Cash flow projection is the most powerful tool in cash management. It enables companies to see the cash flowing in and out of an organization. The direct method of cash flow forecasting is to use the direct cash receipts and disbursements method.
Can retained earnings be used for cash flow purposes?
yes retained earnings can be used to get more capital for business to smooth out the cash flow problems.
The best way to avoid cash flow problems is?
B. constant marketing
Structure of cash flow statement?
structure of cash flow statement as follows:1
What is a marginal cash flow?
limited cash flow.
What is meant by cash flow factoring?
Cash flow factoring is a process in which companies that have cash flow issues and slow-paying customers often sell their invoices or accounts receivables to specialized companies (these are the factors). The factor advances most of the invoices by 70-90%.
Why is cash flow statement prepared by companies?
It is prepared by the companies to show that how cash inflows and outflows are arrived from different business activities.
What does one do to make a cash flow forecast?
Cash flow projection is the most powerful tool in cash management. It enables companies to see the cash flowing in and out of an organization. The direct method of cash flow forecasting is to use the direct cash receipts and disbursements method.
What best describes free cash flow?
Free cash flow is the amount of cash a company has after it has paid to expand or maintain its assets. Free cash flow gives companies the opportunity to pursue immediate opportunities that will allow them to increase shareholder profit.
Can retained earnings be used for cash flow purposes?
yes retained earnings can be used to get more capital for business to smooth out the cash flow problems.
Who Can Use Asset Based Loans?
Asset based loans are used by companies that need capital for the development purposes. Often, businesses that apply for an ABLhave cash flow problems.
The best way to avoid cash flow problems is?
B. constant marketing
What are important aspects of cash flow management?
Cash flow management includes having a reserve on hand. A reserve will help the business remain operational if they experience financial problems.
why does a profitable business have cash flow prablems?
Cash Flow measures how much cash comes in while what goes out. Although you can be profitable but if your cash comes after a long time, sooner or later you will run out of cash to produce more products and land up in cashflow problems.
What is the formula for calculating free cash flow?
Free cash flow equals operating cash flow plus investing cash flow.
Living in the cash flow business commercial what is a cash flow note?
what is a cash flow note?
What is the future cash flow of cash?
The term "future cash flow(s)" describes cash that will be received in the future.
