CASH FLOW - IMPROVING CASH FLOW

Question 1

How can you improve cash flow

Answer 1

Improving cash flow:

2 simple ways = Increase inflow & reduce outflows

Question 2

What usually happens when you try to improve cash flow

Answer 2

There will usually be some sort of issues that you come across when trying to improve cash flow

Question 3

What could happen if you increase the sales price in the hopes of improving cash flow

Answer 3

If you increase the sales price, you may have to change around some things in order to keep selling the same quantity

Question 4

What could happen if you reduce the sales price in the hopes of improving cash flow

Answer 4

If you reduce the selling price, you may have to do more advertising to get more sales
Depends on PED data and how how consumers will react

Question 5

EXAMPLES of strategies to improve cash flow

Answer 5

Another example could be increasing marketing: Will the marketing be effective, will the costs per lead increase etc

Another example could be refusing to offer trade credit - That could lead to consumers going somewhere else (because you wanted your money upfront instead of waiting) - could also impact customer service

Another could be to arrange an overdraft - Potentially with a high interest rate.