ManagingCashFlow
Quick quiz on cash flow management
Inflow or Outflow?
Problems & solutions
Making & justifying choices
Which one of these events might lead to a cash flow problem?
A
Q1
B
C
D
Major customer becomes insolvent
Supplier offers longer payment terms
Warehouse stocks are reduced
Surplus fixed assets are sold
Short-term cash flow can be improved by...
A
Q2
B
C
D
Increasing quantity of stocks
Increasing overheads
Allowing debtors less time to pay
Repaying a bank loan
Factoring might improve the cash flow from…
A
Q3
B
C
D
Customers Banks
Suppliers Shareholders
Which of these would NOT normally improve net profit margin?
A
Q4
B
C
D
Lower overheads
Higher productivity
Lower capacity utilisation
Lower unit costs
Which of these would be a cash inflow into a business?
A
Q5
B
C
D
Dividend to shareholders
Supplier payment
Disposal of fixed asset
Hire purchase payment
Cash flow management in
the news!
Inflow or Outflow?Cash inflows Cash outflows
Inflow or Outflow?Cashflow Inflow OutflowPayments from trade debtorsSale of fixed assetsTax on profitsInterest on loans & overdraftsLoans from bankPayments to trade creditorsShare capital investedRepayment of loansCash sales
Problems & Solutions
Your TaskIdentify TWO ways in which a business could
SLOW
SpeedLimit
100
Speed-up cash inflows
Slow down cash outflows
SLOWCut costsDelay supplier paymentsLease fixed assetsReduce or stop dividendCancel investment
Think!EFFECTS
Reduce customer payment periodEncourage cash salesPricing / discountsSell excess stock or spare fixed assets
Think!EFFECTS
SpeedLimit
100
Choices Choices!
Two mini exam-style case studies:Two cash flow problems
Select one solution from the three choices offered
+ justify your choice