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Q&A - What are the main causes of a cash flow problem?
A cash flow problem arises when a business struggles to pay its debts as they become due.
Note that a cash flow problem is not necessarily the same as experiencing a negative cash flow. A business often experiences a net cash outflow, for example when making a large payment for fixed assets or where there is a seasonal drop in demand.
However, when cash flow is consistently negative and the business uses up its cash balances, then the problems become serious.
The main causes of cash flow problems are summarised below:

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Try some of these superb starter activities for Business Studies:
- Anagram Countdown
- Beat the Teacher
- Bellwork
- Budget Basket
- Memory Challenge
- Loop Cards
- I'm the Question
- Catchphrase - Say What You See!
- Consider All Possibilities (C.A.P)
- i-Teach
- Teacher Talkabout
- Perfect Recall
- Pass the Buck
- What would you have invented?
- These are a few of my favourite things
- Set Your Students the 15 Word Challenge
- Topic Tennis
- What Why Depends - Developing Thinking Skills
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