Question

A smaller firm may have more cash management problems than a larger one, including:

a) Inefficient supply chain management
b) Difficulty in accessing credit
c) Limited market presence
d) Reduced operational costs

Answer 1

A smaller firm may have more cash management problems than a larger one, including inefficient supply chain management, difficulty in accessing credit, limited market presence, and reduced operational costs.

Step-by-step explanation:

A smaller firm may have more cash management problems than a larger one. Some of these problems include inefficient supply chain management, difficulty in accessing credit, limited market presence, and reduced operational costs.

Inefficient supply chain management can lead to delays in receiving inventory and fulfilling customer orders, which can result in lost sales and decreased cash flow. Difficulty in accessing credit means that smaller firms may struggle to secure loans or lines of credit, limiting their ability to invest in the business and manage cash flow. Limited market presence makes it challenging for smaller firms to attract customers and generate revenue, impacting their ability to manage cash effectively. Finally, reduced operational costs can make it difficult for smaller firms to achieve economies of scale, leading to higher expenses and lower cash flow.