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๐ˆ๐ฌ ๐œ๐š๐ฌ๐ก-๐Ÿ๐ฅ๐จ๐ฐ ๐ญ๐ก๐ž ๐ค๐ž๐ฒ ๐ญ๐จ ๐›๐ฎ๐ฌ๐ข๐ง๐ž๐ฌ๐ฌ ๐ฌ๐ฎ๐ซ๐ฏ๐ข๐ฏ๐š๐ฅ?

๐ˆ๐ฌ ๐œ๐š๐ฌ๐ก-๐Ÿ๐ฅ๐จ๐ฐ ๐ญ๐ก๐ž ๐ค๐ž๐ฒ ๐ญ๐จ ๐›๐ฎ๐ฌ๐ข๐ง๐ž๐ฌ๐ฌ ๐ฌ๐ฎ๐ซ๐ฏ๐ข๐ฏ๐š๐ฅ? 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.

๐„๐ฑ๐ญ๐ž๐ซ๐ง๐š๐ฅ ๐Ÿ๐š๐œ๐ญ๐จ๐ซ๐ฌ The Covid crisis was the ultimate shock that the text books classify under the seemingly innocuous heading of external factors.

๐ˆ๐ง๐ฏ๐ž๐ฌ๐ญ๐ข๐ง๐  ๐ญ๐จ๐จ ๐ฆ๐ฎ๐œ๐ก 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.

๐“๐จ๐จ ๐ฆ๐ฎ๐œ๐ก ๐œ๐ซ๐ž๐๐ข๐ญ Equally businesses who had allowed themselves to extend too much credit to their customers found themselves with unhealthy cash-flow documents.

๐Œ๐š๐ง๐š๐ ๐ž๐ฆ๐ž๐ง๐ญ ๐œ๐จ๐ง๐ญ๐ซ๐จ๐ฅ Large companies often undertake cash-flow forecasts every hour, aiming to identify cash-flow problems before they arise.

๐’๐จ๐ฅ๐ฏ๐ข๐ง๐  ๐š ๐œ๐š๐ฌ๐ก-๐Ÿ๐ฅ๐จ๐ฐ ๐œ๐ซ๐ข๐ฌ๐ข๐ฌ 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.

๐…๐จ๐ซ ๐๐ž๐ญ๐š๐ข๐ฅ๐ฌ ๐จ๐Ÿ ๐ก๐จ๐ฐ ๐ฐ๐ž ๐œ๐š๐ง ๐ก๐ž๐ฅ๐ฉ ๐ฒ๐จ๐ฎ๐ซ ๐œ๐ก๐ข๐ฅ๐, ๐ฉ๐ฅ๐ž๐š๐ฌ๐ž ๐œ๐จ๐ง๐ญ๐š๐œ๐ญ ๐•๐š๐ฅ๐ž๐ซ๐ข๐ž ๐–๐ž๐ฌ๐ญ๐จ๐ง ๐จ๐ง: Email: valerie.weston@minervatuition.com Phone: +852 6156 5705. We would be delighted to hear from you.


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