MGT 3111 Chapter Notes - Chapter 10: Cash Flow
Document Summary
Inventory must be purchased, employees must be paid, and advertising must be paid before cash is generated from sales. Some products are facilities, and under development purchasing for years before they equipment typically generate earnings. e(cid:454)(cid:272)eeds a fi(cid:396)(cid:373)"s ability to provide funds for these. The up-front costs ofte(cid:374) e(cid:454)(cid:272)eed a fi(cid:396)(cid:373)"s ability to fund these needs on its own. activities on its own. The three reasons start ups need funding is because of cash flow challenges, capital investments and lengthy product development cycles. In regards to cash flow challenges, as a firm grows, it requires an increasing amount of cash to operate. If your employees are not paid, they will not continue to work for you. These must be paid before cash is generated from sales. Firms usually need to raise money in the early stages to fund capital investments. Capital investments talks of buying real state and building facilities to produce your product.
