Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Choose a business and discuss the cash cycle and how it works in your view. What are the usual opportunities in the cash cycle for

Choose a business and discuss the cash cycle and how it works in your view. What are the usual opportunities in the cash cycle for improvements or problems?

an example:

In a used car business we need to be mindful of cash flow because sales are uneven and costs can be fairly constant. Revenue is based on our inventory of cars to be sold and the general environment for buying, pricing and selling that inventory.

Fixed costs are usually fairly low - utilities, insurance, and possibly rent. Variable costs are paid when we make a sale so for this analysis are relevant to operations only from the point of impact on net profits.

We can operate on a cash only basis but that will limit our sales so we usually need to align with a bank or operation to provide financing unless we wish to take on that risk and operational complexity.

If we outsource our financing then cash collection becomes much easier but we will lose an opportunity for a source of profit.

There is a little more to this but I hope you all can glean what I am looking for in this discussion.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Focus On Personal Finance

Authors: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes, Melissa Hart

5th Edition

0077861744, 978-0077861742

More Books

Students also viewed these Finance questions