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

Explain strategic framework for crm, Question 1: Name and explain the ...

Question 1: Name and explain the three types of CRM that you know about? Question 2: a. Name the Seven best practices in making vision and values work. b. Give three e

Placement, define placement and its importance

define placement and its importance

Mr, Assess the impact of fiscal and monetary policy on business organisatio...

Assess the impact of fiscal and monetary policy on business organisations and their Activities?

Benefits, inportant banafits of business communission

inportant banafits of business communission

Where are the training and education different, Where are the training and ...

Where are the training and education different? The training and education are different from that of given level within content and method. 1. Work Force. 2. Middle Leve

Explain the elements of the negotiation process, Question 1: Explain br...

Question 1: Explain briefly the seven elements of the negotiation process known as the Seven Pillars of the Negotiational Wisdom which need to be considered before and durin

Explain five benefits of delegating effectively, QUESTION 1 (a) Describ...

QUESTION 1 (a) Describe the process that a Procurement and Supply Manager might apply to effectively delegate when managing the Procurement and Supply function (b) Explain f

Business environment, 1.(a) identify and give out the explanation of differ...

1.(a) identify and give out the explanation of different categories of legal system. (b) How is legal system in bznz enforce

Sources of manpower recruitment by outside the company, Define the sources ...

Define the sources of manpower recruitment from outside the company. Sources of manpower recruitment by outside the company: • Friends and relatives of current workers duly

Theory x and y of mcgregor, 1. Corporate Social Responsibility remains as a...

1. Corporate Social Responsibility remains as an essential part of business practice today. It can improve the reputation of the organisation since stakeholders will know the costs

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