Causes of cash flow problems:

• Cash flow is the movement of money in and out of a business, which is crucial for paying bills, investing in growth, and avoiding insolvency
• External causes of cash flow problems include economic conditions, industry trends, supply chain issues, and government policies
• Internal causes of cash flow problems include slow payment from customers, overspending, seasonal fluctuations, and unexpected costs
• Short-term cash flow problems arise from temporary disruptions and can typically be resolved within a few months
• Steps to address short-term cash flow problems

  1️⃣ Short-term loans

  2️⃣ Payment plans

  3️⃣ Expense reduction
• Short-term cash flow problems last for years.

  False
• Cash flow is important because it enables a business to pay its bills and avoid insolvency.


  True
• Industry trends like technological disruptions can cause cash flow problems.


  True
• Effectively managing cash flow is crucial for a business to remain financially stable and continue operations


  True
• External factors affecting cash flow are often outside the business's direct control but can be managed with anticipation


  True
• Internal causes of cash flow problems are within the business's control and can be addressed with effective cash flow management


  True
• Short-term cash flow problems arise due to temporary disruptions in cash inflows
• A retail business might face short-term cash flow problems during a slow sales season like winter
• Recessions are considered a key external cause of cash flow problems due to their impact on customer demand
• Slow payment from customers delays cash inflows
• Long-term cash flow problems can result in the inability to invest
• Cash flow problems can lead to insolvency if not managed effectively.


  True
• Match the cause of cash flow problems with its description:

  Slow payment from customers ↔️ Customers taking longer to pay invoices

  Overspending ↔️ Excessive spending on expenses or investments

  Seasonal fluctuations ↔️ Uneven cash inflows and outflows throughout the year

  Unexpected costs ↔️ Unforeseen expenses like equipment breakdowns
• Match the external cause with its description:

  Economic conditions ↔️ Recessions, inflation, or macroeconomic factors

  Industry trends ↔️ Changes in competition, regulations, or technology

  Supply chain issues ↔️ Disruptions in raw materials or product supply

  Government policies ↔️ Changes in tax laws or trade policies
• Match the internal cause with its description:

  Slow payment from customers ↔️ Customers taking longer to pay invoices

  Overspending ↔️ Excessive spending beyond the business's means

  Seasonal fluctuations ↔️ Uneven pattern of cash inflows and outflows

  Unexpected costs ↔️ Unforeseen expenses such as equipment repair
• Match the category with its characteristics:

  Short-term ↔️ Duration: Weeks to months

  Long-term ↔️ Duration: Years
• Short-term cash flow problems can be caused by seasonal sales declines or unexpected expenses


  True
• What is a solution for short-term cash flow problems?

  Short-term loans
• What is an external cause of cash flow problems?

  Recessions
• What is an internal cause of cash flow problems?

  Slow payment from customers
• What is the duration of short-term cash flow problems?

  Weeks to months
• Match the type of cash flow problem with its solution:

  Short-term ↔️ Short-term loans

  Long-term ↔️ Financial restructuring
• Steps of how cash flow problems impact business operations

  1️⃣ Difficulties paying suppliers and wages

  2️⃣ Delays in production

  3️⃣ Reduced service quality
• Internal causes of cash flow problems are uncontrollable within the business.

  False
• Cash flow problems can limit the ability to fund growth projects