Question 1: If you could pick a single source of cash for your business, what would it be? Why?
Question 2: How can a business earn large profits but have a small balance in Retained Earnings?
Question 3: How can a business lose money for many years and still have plenty cash?
Question 4: Give two reasons why a business can be profitable for many years and still have a cash shortage?
Question 5: Suppose your business has $80,000 worth of liabilities that must be paid within the next three months. Your liquid (can be turned into cash quickly) assets total only $60,000, your sales and collections from customers are slow. Identify two ways to finance the remaining $20,000 you will need, so you can pay all of the liabilities when they are due.