12.2 cash flow management

Question 1

Cash Flow

Answer 1

• Movement of cash receipts and cash payments resulting from transactions over a period of time

Question 2

Cash Flow Management Strategies

Answer 2

• Distribution of Payments
• Discounts for Early Payment
• Factoring

Question 3

Cash Flow Management Strategies: DISTRIBUTION OF PAYMENTS

Answer 3

• Distributing payments throughout the months so that large expenses do not occur at the same time
• Equal cash outflow each month rather than large outflows in particular months

Question 4

Cash Flow Management Strategies: DISCOUNTS FOR EARLY PAYMENT

Answer 4

• Offering debtors a discount for early payments

Question 5

Cash Flow Management Strategies: FACTORING

Answer 5

• Selling accounts receivable for a discounted price to a finance or factoring company.