𝐈𝐬 𝐜𝐚𝐬𝐡-𝐟𝐥𝐨𝐰 𝐭𝐡𝐞 𝐤𝐞𝐲 𝐭𝐨 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐬𝐮𝐫𝐯𝐢𝐯𝐚𝐥?

𝐈𝐬 𝐜𝐚𝐬𝐡-𝐟𝐥𝐨𝐰 𝐭𝐡𝐞 𝐤𝐞𝐲 𝐭𝐨 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐬𝐮𝐫𝐯𝐢𝐯𝐚𝐥? For students of business, the Covid crisis has high-lighted the importance of cash-flow. For many businesses it is not lack of profitability that condemns them to failure, it is the lack of cash that forces them into insolvency.

𝐄𝐱𝐭𝐞𝐫𝐧𝐚𝐥 𝐟𝐚𝐜𝐭𝐨𝐫𝐬 The Covid crisis was the ultimate shock that the text books classify under the seemingly innocuous heading of external factors.

𝐈𝐧𝐯𝐞𝐬𝐭𝐢𝐧𝐠 𝐭𝐨𝐨 𝐦𝐮𝐜𝐡 Businesses who had sunk too much finance into fixed assets found that 2020 was a challenging year, illustrating that when possible leasing assets, rather than buying, can be shrewd financial management.

𝐓𝐨𝐨 𝐦𝐮𝐜𝐡 𝐜𝐫𝐞𝐝𝐢𝐭 Equally businesses who had allowed themselves to extend too much credit to their customers found themselves with unhealthy cash-flow documents.

𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭 𝐜𝐨𝐧𝐭𝐫𝐨𝐥 Large companies often undertake cash-flow forecasts every hour, aiming to identify cash-flow problems before they arise.

𝐒𝐨𝐥𝐯𝐢𝐧𝐠 𝐚 𝐜𝐚𝐬𝐡-𝐟𝐥𝐨𝐰 𝐜𝐫𝐢𝐬𝐢𝐬 Students of business are often set questions asking them to solve a cash-flow crisis. When answering they would be wise to consider the consequences of their recommendations. Taking out an overdraft has a financial cost, reducing staffing impacts on customer service whilst cutting expenditure may have an impact on business efficiency and even safety.

𝐅𝐨𝐫 𝐝𝐞𝐭𝐚𝐢𝐥𝐬 𝐨𝐟 𝐡𝐨𝐰 𝐰𝐞 𝐜𝐚𝐧 𝐡𝐞𝐥𝐩 𝐲𝐨𝐮𝐫 𝐜𝐡𝐢𝐥𝐝, 𝐩𝐥𝐞𝐚𝐬𝐞 𝐜𝐨𝐧𝐭𝐚𝐜𝐭 𝐕𝐚𝐥𝐞𝐫𝐢𝐞 𝐖𝐞𝐬𝐭𝐨𝐧 𝐨𝐧: Email: valerie.weston@minervatuition.com Phone: +852 6156 5705. We would be delighted to hear from you.