20 mark cash flow

Question 1

overdraft

Answer 1

• bank allows a business to spend money they haven’t got
• equal to a short-term loan
• Pura aims to rapidly expand by increasing output = increase costs = more ingredients are needed
• enables pura to stay competitive in a competitive market Unilever
• overdraft = helps handle short term cash flow problems = doesn’t run out of cash

Question 2

overdraft counterbalance

Answer 2

• high interest rates
• help with short term cash flow problems
• if struggle to pay back may lead to even mire problems

Question 3

credit

Answer 3

• allowing retailers to buy pura but are given time to pay it back
• one month trade credit
• if reduced = get money back quicker = cash inflows
• negative cash of 3800 in December
• avoid overdrat interest rates

Question 4

cb credit

Answer 4

• may not agree
• fell pressure find someone else