Cash Flow Problems Are One of the Most Common Reasons for Business Failure

Cash run away problems are one of the well-nigh special K reasons for business failure.
  Discuss why this was the case using the cable car company Saab.
  Provide recommendations as to how they could have improved their property feast problems.

For Saab, one Swedish automotive manufacturer which employ to have a successful transition from a subject field military aircraft manufacturer, its application of bankruptcy was filed in the end of 2011, by and by struggling on brink of bankruptcy for a keen-sighted time. There were a lot of indications showing that SAAB had serious currency flow problems which may finally cause the situation. Since April 2011, Saab had already suspend all of its production activities after falling to pay suppliers for the piercing materials and staffs salries. In this essay, whether silver flow problems are one of the some common reasons for business failure entrust be discussed by using SAAB as the example and recommendations for improvement of such problems get out also be attached next.

Cash flow is the flow of money into and out of the business in a given period of time (Marcouse, 2008:30) and managing cash flow is one of the most important aspects of financial management.



The reason of such importance is that still a company with high profits but no adequate availability of cash from day to day, it can not pay its liabilities and the funding strand breaks. (Marcouse, 2011:79) If this happened, many problems depart occur, for example, suppliers will refuse to deliver raw materials, staff will renounce working for no salaries, companies ability will be doubted and they will miss opportunities of growth. Therefore, a good management of cash flow not only means a good direct condition of business but also shows positive prospects for development. For Saab, the cash flow condition was not optimistic. Those indications being described above clearly showed that Saab failed to manage cash flow and had serious cash flow problems.

Cash flow contains two parts, cash influx and cash...If you want to get a full essay, order it on our website: Orderessay



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