Changing the way you learn

CASH FLOW/WORKING CAPITAL PROBLEMS

ASSETS; RESOURCE OWN BY THE COMPANY
1. NON CURRENT ASSET(FIXED ASSETS) HOLD FOR A YEAR OR MORE, CAN BE USED REPEATEDLY AND ARE NOT INTENDED FOR IMMEDIATE RESALE
  1. TANGIBLE ASSETS; PHYSICAL ASSETS
  2. INTANGIBLE ASSETS; NOT HAVE A PHYSICAL ASSET
2. CURRENT ASSETS;STOCK, DEBTORS,CASH
LIABILITIES
1. DEBTS OWED BY THE BUSINESS
2. LONG TERM;DUE AFTER MORE THAN ONE YEAR
3. CURRENTS LIABLILITIES; WITHIN ONE YEAR( TRADE CREDITIORS, BANK OVERDRAFT)
EQUITY OR CAPTIAL;FUNDS INVESTED IN THE COMPANY
1. SHAEHOLDERS FUNDS; INVESTED AT THE START
2. RESERVES; RETAINED PROFIT(VALUE INCREASES BY PROFIT REDUCED BY LOSES
ALLOWING TO MUCH CREDIT
1. WAITING FOR MONEY;FORCED TO BORROW=VUNERABLE
STOCKPILLING
1. BUILDING UP STOCK LEVELS;TIES UP MONEY/ITEMS MAY NEED TO CHANGE ACCORDINGLY
OVERPBORROWING
1. CANNOT PAY BACK AMOUNTS OWED ON LOANS(INTEREST+CAPITAL) IN THE PERIOD IT IS DUE
UNDERESTIMATING INFLATION
1. RISE IN GENERALLEVELS OF PRICE THAT WAS NOT FORSEEN;COST RISING
UNFORSEEN EXPENDITURE
1. COSTS THAT WERE NOT FORESEEN OR BUDGETED FOR BUT ARE NECESSARY FOR THE BUSINESS
CHANGES IN DEMAND
1. CAUSED BY RECESSION CHANGES IN FASHION/SEASONAL FACTORS(COULD RESULT IN LESS OR MORE SALES)
SEASONAL FACTORS
1. CAUSED BY THE RECESSION/ BY THE TIME OF YEAR
PRODUCTION PROBLEMS
1. INTERUPTIONS TO PRODUCTION DELAY THE PRODUCE REACHING THE MARKET
OVERTRADING
1. EXPANDS AND THEREFORE NEEDS MORECASH TO FINANCE EXTRA

CASH FLOW/WORKING CAPITAL PROBLEMS

	Created by Holly Butcher almost 10 years ago