Question

Carlos is the manager of Oh! Canada Sporting Goods. During the past six months, his cash expenditures have exceeded his cash receipts. Oh! Canada is suffering from a(n) ________ problem.

Answer 1

Answer:

Cash flow.

Explanation:

A cash flow problem arises when an organization is unable to pay up it's debts. Different organisations tends to experience cash flow problems during their growth stage.

Cash flow problems could be due to the following reasons:

1) Reduction in the amount of profit that comes into the business.

2) Investing a large amount of money in production processes.

3) Giving goods to a large amount of customers on credit.

Businesses can improve cash flow by a reduction in the amount of their expenses, this can be achieved by cutting down costs.