Financial Management and Cash Flow Quiz
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Questions and Answers

What are the potential consequences of a cash shortfall in an organization?

  • Lowered tax liabilities, increased profit margins, improved cash flow, and higher stock prices
  • Reduced employee motivation, delayed project timelines, decreased customer satisfaction, and increased operational costs
  • Enhanced employee benefits, expanded production capacity, diversified investment portfolios, and increased market share
  • Inability to meet payroll, unpaid suppliers, missed loan payments, and no dividend checks for investors (correct)
  • What happens if an organization fails to meet payroll due to a cash shortfall?

  • Employee productivity improves, and operational efficiency increases
  • Suppliers offer extended credit terms, and investors provide additional funding
  • Employee morale decreases, and legal consequences may arise (correct)
  • The government provides financial assistance, and customers increase their orders
  • Why is managing cash flow crucial for the operation of every organization?

  • It allows for aggressive expansion and high-risk investments
  • It is only important for start-up companies and not established organizations
  • It primarily benefits the top management and does not affect other stakeholders
  • It ensures the ability to meet financial obligations and maintain stakeholder confidence (correct)
  • Is absolutely crucial to the operation of every organization. If there is ever a cash shortfall, payroll cannot be met, suppliers are not paid, scheduled loan payments will not be made, and investors will not receive dividend checks.

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