Pay suppliers, pay for expenses, pay employees wages
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What is a cash-flow forecast?
an estimate of the future cash inflows and outflows
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Net cash flow
cash inflow minus cash outflow
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Why is cash forecasting important ?
It's necessary to predict cash shortages and take action to avoid them
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How do you call a situation where a company doesn't have any more cash ?
A cash shortage
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Why do companies try to avoid cash shortages at all costs ?
Because it could mean that the company cannot pay for its short term expenses. This could in turn cause bankruptcy.
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If cash shortage is predicted, what can the company do to avoid it ?
Delay payments, raise finance (sell inventory, bank loan, resources...), arrange an overdraft with the bank...
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Why is crowdfunding not a good source of finance for a cash shortage ?
Because crowd funding is a slow way to raise a huge amount of money for a specific project. People are not willing to donate money to a company for no reason.
