Q&A - What are the main causes of a cash flow problem?
A cash flow problem arises when a business struggles to pay its debts as they become due.
Note that a cash flow problem is not necessarily the same as experiencing a negative cash flow. A business often experiences a net cash outflow, for example when making a large payment for fixed assets or where there is a seasonal drop in demand.
However, when cash flow is consistently negative and the business uses up its cash balances, then the problems become serious.
The main causes of cash flow problems are summarised below:
Join Jim Riley and the tutor2u BUSS4 team for an intensive day designed to prepare students for the challenges of BUSS4 in June 2015. Each of the five workshop sessions introduces and builds effective essay planning and writing technique. We do this in the context of looking at both Manufacturing in the UK (Section A) and core topics for Section B including leadership, change management, technology, strategic choice and globalisation.