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unit 5 dq small business

unit 5 dq small business - but there is one thing that...

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Hello professor and class, Sales, cost, and profits do not necessarily coincide with their associated cash inflows and outflows. While a sale may have been secured and product delivered, the related payment may be deferred as a result of giving credit to the customer. At the same time, payments must be made to suppliers and staff. Cash must be invested in rebuilding depleted stocks, new equipment may have to be purchased. The net result is that cash receipts often lag cash payments and, while profits may be reported, the business may experience a short- term cash shortfall. For this reason it is essential to forecast cash flows as well as project likely profits. Successful companies can also go out of business. You can have sales growth, customer loyalty
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Unformatted text preview: but there is one thing, that company’s need which is cash. To make the business profitably and successful you need to have the skills to manage the money that comes in and out of your business. To plan for growth builtny takes their time looks over their options so their company will be productive and successful. To attract bank financing they didn’t entirely focus on the long term profits. They evened out short and long term profits to get the bank to look at the potential of the company. Source; Difference between Cash Flow and profit www.bizfinance.about.com/od Cash Management - Cash Flow - Liquidity Management www.bizfinance.about.com...
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