Question

how do cash flow problems usually start? multiple choice question. the firm issues stock. the firm uses up its credit. the firm has an initial public offering. the firm uses improper ratio analysis.

Answer 1

The way that cash flow problems usually start is the firm uses up its credit.

How do cash flow problems usually start?

Cash flow problems refer to when a company does not have enough cash to take care of its obligations. Usually when this happens, a firm can simply just borrow the cash from those it has credit with.

However, if for some reason it has borrowed too much and so has used up its credit, then it will have issues with taking care of cash expenses. This is where cash flow problems will then begin.

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