3.5.2

Solutions to Cash Flow Problems

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Solutions to Cash Flow Problems

Businesses can improve their cash flow by:

Rescheduling cash payments

Rescheduling cash payments

A business can could delay payment to suppliers via things like trade credits.
If a business predicted negative cash flow in February but a positive one in March, it may be able to delay the payment until March.

Overdrafts

Overdrafts

Overdrafts allow a business to have a negative current account balance in the short-term.
Banks effectively provide “bridging finance” to plug a short-term shortfall (or lack) of cash.

Reducing cash outflows

Reducing cash outflows

A business can try to reduce cash outflows if they predict a liquidity problem.
Delaying the payment of bills is one way to do this. For example, a business change the payment dates for loans and try to secure trade credits.
Forecasts are useful because the earlier a company predicts a cash shortfall, the better they can adjust their cash payments.

Finding new sources of finance

Finding new sources of finance

Finding other sources of finance can provide a firm with the money they need to overcome a liquidity problem.

Increasing cash inflows

Increasing cash inflows

Increasing sales, chasing customers that owe money and selling assets can all increase cash inflows.

1

Business Organisation & Environment

1.1

Introduction to Business Management

1.1.1Why Businesses Exist & Sectors

1.2

Types of Organisation

1.2.1Sole Traders 1.2.2Limited Liability 1.2.3Non-Profit 1.2.4Franchising 1.2.5End of Topic Test - Franchising

1.3

Organisational Objectives

1.3.1External Environments 1.3.2Business Mission & Corporate Objective 1.3.3Mission, Corporate Objectives & Strategy 1.3.4SWOT Analysis 1.3.5End of Topic Test - SWOT Analysis

1.4

Stakeholders

1.4.1Stakeholders

1.5

External Environment

1.5.1Social & Technological Environment 1.5.2Lifestyle & Technological Environment 1.5.3Corporate Social Responsibility 1.5.4Economic Environment 1.5.5Political & Legal Change

1.6

Growth & Evolution

1.6.1Growth & Retrenchment 1.6.2Challenges of Growth 1.6.3Growth Models 1.6.4End of Topic Test - Diseconomies of Scale 1.6.5Internationalisation 1.6.6Sourcing Resources & Entering Markets 1.6.7End of Topic Test - Internationalisation 1.6.8Managing Internationalisation 1.6.9Impact of Internationalisation

1.7

HL Only: Organisational Planning Tools

1.7.1Organisational Planning Tools

2

Human Resource Management

2.1

Functions & Evolution of Human Resource Management

2.1.1Setting Human Resource Objectives 2.1.2Human Resource Management 2.1.3Labour Turnover & Retention 2.1.4Labour Productivity

2.2

Organisational Structure

2.2.1Organisational Structures

2.3

Leadership & Management

2.3.1Managers 2.3.2Management Theories 2.3.3End of Topic Test - Management

2.4

Motivation

2.4.1Motivating & Engaging Employees 2.4.2Taylor's Theory 2.4.3Maslow's Theory 2.4.4Herzberg's Theory 2.4.5Different Incentives 2.4.6Evaluating Incentives

2.5

Organisational (Corporate) Culture

2.5.1Managing Organisational Culture 2.5.2Organisational Structures

2.6

HL Only: Industrial/Employee Relations

2.6.1Improving Employer-Employee Relations 2.6.2Case Study - The Winter of Discontent

3

Finance & Accounts

3.1

Sources of Finance

3.1.1Internal Sources of Finance 3.1.2External Sources of Finance 3.1.3Factors for Financing 3.1.4End of Topic Test - Debt

3.2

Costs & Revenues

3.2.1Costs & Revenues

3.3

Break-Even Analysis

3.3.1Profit 3.3.2Break-Even Analysis

3.4

Profitability & Liquidity Ratio Analysis

3.4.1Profitability Analysis

3.5

Cash Flow

3.5.1Cash Flow 3.5.2Solutions to Cash Flow Problems 3.5.3Improving Cash Flow & Profits

3.6

HL Only: Investment Appraisal

3.6.1Investment Appraisal

3.7

HL Only: Budgets

3.7.1Cash-Flow & Budgets

4

Marketing

4.1

The Role of Marketing

4.1.1Setting Marketing Objectives 4.1.2Market Calculations

4.2

Marketing Planning

4.2.1Marketing Mix 4.2.2Segmentation 4.2.3Niche & Mass Markets

4.3

Market Research

4.3.1Market Research 4.3.2Market Mapping 4.3.3Methods of Market Research

4.4

The 4 Ps

4.4.1Product Decisions 4.4.2Pricing Decisions & Price Skimming 4.4.3Pricing Decisions & Price Penetration 4.4.4End of Topic Test - Pricing & Competition 4.4.5Promotional Decisions 4.4.6Promotional Decisions 2 4.4.7Promotional Decisions 3 4.4.8Digital Marketing 4.4.9Evaluating Digital Marketing 4.4.10Case Study - The Marketing Mix & Promotion 4.4.11Place & Distribution

4.5

HL Only: The Extended Marketing Mix

4.5.1The Extended Marketing Mix

4.6

HL Only: International Marketing

4.6.1International Marketing

4.7

E-Commerce

4.7.1E-Commerce

5

Operations Management

5.1

The Role of Operations Management

5.1.1Setting Operational Objectives

5.2

Production Methods

5.2.1Production Processes Overview 5.2.2Production Processes 5.2.3Production Efficiency 5.2.4Technology & Production

5.3

HL Only: Lean Prodution & Quality Management

5.3.1Importance of Quality 5.3.2Measuring & Identifying Quality 5.3.3Total Quality Management 5.3.4Evaluating Total Quality Management 5.3.5Case Study - Toyota Production System

5.4

HL Only: Production Planning

5.4.1Capacity 5.4.2Productivity & Efficiency 5.4.3Technology & Efficiency 5.4.4Improving the Supply Chain 5.4.5Inventory 5.4.6Outsourcing

5.5

HL Only: Research & Development

5.5.1Organisational Planning Tools

Jump to other topics

1

Business Organisation & Environment

1.1

Introduction to Business Management

1.1.1Why Businesses Exist & Sectors

1.2

Types of Organisation

1.2.1Sole Traders 1.2.2Limited Liability 1.2.3Non-Profit 1.2.4Franchising 1.2.5End of Topic Test - Franchising

1.3

Organisational Objectives

1.3.1External Environments 1.3.2Business Mission & Corporate Objective 1.3.3Mission, Corporate Objectives & Strategy 1.3.4SWOT Analysis 1.3.5End of Topic Test - SWOT Analysis

1.4

Stakeholders

1.4.1Stakeholders

1.5

External Environment

1.5.1Social & Technological Environment 1.5.2Lifestyle & Technological Environment 1.5.3Corporate Social Responsibility 1.5.4Economic Environment 1.5.5Political & Legal Change

1.6

Growth & Evolution

1.6.1Growth & Retrenchment 1.6.2Challenges of Growth 1.6.3Growth Models 1.6.4End of Topic Test - Diseconomies of Scale 1.6.5Internationalisation 1.6.6Sourcing Resources & Entering Markets 1.6.7End of Topic Test - Internationalisation 1.6.8Managing Internationalisation 1.6.9Impact of Internationalisation

1.7

HL Only: Organisational Planning Tools

1.7.1Organisational Planning Tools

2

Human Resource Management

2.1

Functions & Evolution of Human Resource Management

2.1.1Setting Human Resource Objectives 2.1.2Human Resource Management 2.1.3Labour Turnover & Retention 2.1.4Labour Productivity

2.2

Organisational Structure

2.2.1Organisational Structures

2.3

Leadership & Management

2.3.1Managers 2.3.2Management Theories 2.3.3End of Topic Test - Management

2.4

Motivation

2.4.1Motivating & Engaging Employees 2.4.2Taylor's Theory 2.4.3Maslow's Theory 2.4.4Herzberg's Theory 2.4.5Different Incentives 2.4.6Evaluating Incentives

2.5

Organisational (Corporate) Culture

2.5.1Managing Organisational Culture 2.5.2Organisational Structures

2.6

HL Only: Industrial/Employee Relations

2.6.1Improving Employer-Employee Relations 2.6.2Case Study - The Winter of Discontent

3

Finance & Accounts

3.1

Sources of Finance

3.1.1Internal Sources of Finance 3.1.2External Sources of Finance 3.1.3Factors for Financing 3.1.4End of Topic Test - Debt

3.2

Costs & Revenues

3.2.1Costs & Revenues

3.3

Break-Even Analysis

3.3.1Profit 3.3.2Break-Even Analysis

3.4

Profitability & Liquidity Ratio Analysis

3.4.1Profitability Analysis

3.5

Cash Flow

3.5.1Cash Flow 3.5.2Solutions to Cash Flow Problems 3.5.3Improving Cash Flow & Profits

3.6

HL Only: Investment Appraisal

3.6.1Investment Appraisal

3.7

HL Only: Budgets

3.7.1Cash-Flow & Budgets

4

Marketing

4.1

The Role of Marketing

4.1.1Setting Marketing Objectives 4.1.2Market Calculations

4.2

Marketing Planning

4.2.1Marketing Mix 4.2.2Segmentation 4.2.3Niche & Mass Markets

4.3

Market Research

4.3.1Market Research 4.3.2Market Mapping 4.3.3Methods of Market Research

4.4

The 4 Ps

4.4.1Product Decisions 4.4.2Pricing Decisions & Price Skimming 4.4.3Pricing Decisions & Price Penetration 4.4.4End of Topic Test - Pricing & Competition 4.4.5Promotional Decisions 4.4.6Promotional Decisions 2 4.4.7Promotional Decisions 3 4.4.8Digital Marketing 4.4.9Evaluating Digital Marketing 4.4.10Case Study - The Marketing Mix & Promotion 4.4.11Place & Distribution

4.5

HL Only: The Extended Marketing Mix

4.5.1The Extended Marketing Mix

4.6

HL Only: International Marketing

4.6.1International Marketing

4.7

E-Commerce

4.7.1E-Commerce

5

Operations Management

5.1

The Role of Operations Management

5.1.1Setting Operational Objectives

5.2

Production Methods

5.2.1Production Processes Overview 5.2.2Production Processes 5.2.3Production Efficiency 5.2.4Technology & Production

5.3

HL Only: Lean Prodution & Quality Management

5.3.1Importance of Quality 5.3.2Measuring & Identifying Quality 5.3.3Total Quality Management 5.3.4Evaluating Total Quality Management 5.3.5Case Study - Toyota Production System

5.4

HL Only: Production Planning

5.4.1Capacity 5.4.2Productivity & Efficiency 5.4.3Technology & Efficiency 5.4.4Improving the Supply Chain 5.4.5Inventory 5.4.6Outsourcing

5.5

HL Only: Research & Development

5.5.1Organisational Planning Tools

Practice questions on Solutions to Cash Flow Problems

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1
Which of these is not a way businesses can improve their cash flow?Multiple choice
2
How can businesses improve their cash flow?Fill in the list
3
Which of the following will not increase cash inflows?Multiple choice
4
What are trade credits?Multiple choice

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Cash Flow

Improving Cash Flow & Profits