Key Financial Terms - Topic 2.24 - Cash Flow

CASH FLOW is an important concept to grasp when managing a company.  In layman terms it is the rate at which money is being deposited and disbursed from the company's bank account.  If there is always more money going out of the account then coming in, the company will be out-of-business pretty quickly.

1. How can a company spend more money than it brings in?
2. What are some possible causes of negative cash flow - try to come up with three?  Think back to the march of dollars.
3. When is a company particularly at risk of experiencing negative cash flow?

We'll be checking your answers, and giving you some feedback to make sure you successfully complete the course!