12 Questions
What is the main purpose of cash in a company?
To exchange goods, debt, or services
Who is primarily responsible for managing cash within a company?
Accountant
What is the most effective way to overcome a cash shortage?
Negotiate longer credit terms with suppliers
Which of the following factors could contribute to a cash shortage in a business?
Lack of planning
What does positive cash flow mean for a business?
More money is coming into the business than going out
How can a company prevent a cash shortage?
By wisely using cash flow forecasting
What is the main goal when trying to improve net cash flow?
Increase cash inflows
What is the relationship between cash flow and product life cycles?
Ignoring product life cycles could lead to serious consequences for cash flow
Why is cash flow forecasting important for businesses?
To identify potential cash shortages and business problems
What is working capital in a business context?
The capital needed for day-to-day operational expenses and short-term debts
How can a business improve its working capital?
Reducing the time taken to receive payments from customers
What is the difference between gross profit and net profit?
Gross profit subtracts expenses from revenues, while net profit deducts all costs from revenues
Learn about cash as a current asset that involves currency or its equivalents, its importance in financing company activities, and who is responsible for managing cash within an organization.
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