Cashflow Flashcards
1
Q
What is a businesses cashflow
A
the net value of money entering and leaving a business
2
Q
How can you improve business cashflow
A
- Reduce costs
by trimming labour costs or production cost e.g. cheaper suppliers - Increasing income
sell more goods, increase selling price - Borrow money
Bank loans etc
3
Q
What are the negatives of borrowing money
A
Bank loans are likely to gain interest i.e. be more expensive to pay of as time increases
4
Q
What are negatives of cutting cost
A
Products may face lower quality, less likely to be bought
5
Q
What is a negative of increasing income
A
Money spent on marketing to increase sales may exceed sales revenue and could lead to even worsening cashflow
