Definition of liquidity problem, Business Management

Assignment Help:

An examination of up to three reasons is adequate for maximum marks.

a)  Cash Flow estimate for Cottam Stationers Aug

 

Sep

Oct

Nov

Cash sales

2000

5000

2000

3000

Stock purchases

1000

2500

1000

1500

Rent

0

2000

0

2000

Utilities

500

500

500

500

Other costs

2000

1000

1000

1000

Total outflow

3500

6000

2500

5000

Opening cash balance

5000

3500

2500

2000

Net cash flow

(1500)

(1000)

(500)

(2000)

Closing cash balance

3500

2500

2000

0




 

 

 

 

 

b) Definition of liquidity problem, i.e. the degree to which Cottam Stationers can meet its short term debts. The firm seems to be suffering from deterioration liquidity as seen by the closing balance figures. The net cash flow for the first four months of trading is also negative suggesting the firm has inadequate working capital.


Related Discussions:- Definition of liquidity problem

Discuss how can workplace violence be prevented, Question 1: (a) Explai...

Question 1: (a) Explain what is a chemical hazard and under what circumstances do chemical substances become hazardous. (b) How do chemical hazards affect the body and what

Symptoms of ineffective teams, QUESTION (a) Inexperienced speakers usua...

QUESTION (a) Inexperienced speakers usually make the mistake of starting to plan the introduction part first. Discuss and elaborate on the different approaches/patterns used fo

Measures of a web site''s performance, QUESTION (a) Briefly describe th...

QUESTION (a) Briefly describe three sticky features that Web sites use to attract and keep visitors. (b) Provide a detailed discussion on cookies, by giving two advantages a

Electronic surveillance of employees, 1. Explain where an employee can reas...

1. Explain where an employee can reasonably expect to have privacy in the workplace. Employees can reasonably expect to have privacy in the workplace as it pertains to issues su

What are barriers of communication, QUESTION a) (i) Elaborate on the...

QUESTION a) (i) Elaborate on the importance of feedback. (ii) Explain how it helps to enhance effective communication. b) (i) What are barriers of communication?

Help, Can I work here as assignment writer?

Can I work here as assignment writer?

Business analysis using triple triangle framework, how to write a company a...

how to write a company analysis in light of the Triple triangle Framework?

What are the scopes of management information system, What are the scopes o...

What are the scopes of Management Information System? Scope of Management Information System is: a. For giving timely, accurate, relevant and whole information. b. For gi

Leaders, What are the characteristics of leaders who derailed (failed to pe...

What are the characteristics of leaders who derailed (failed to perform successfully) and were either dismissed, transferred, opted for early retirement, or simply plateaued with n

Determine the sample size needed to cut the margin of error, Determine the ...

Determine the sample size needed to cut the Margin of Error: Below you are given ages that were obtained by taking a random sample of 9 undergraduate students. 19 22 23 19

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd