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Shortage of cash requiring corrective actions to avoid issues.Select the correct termCash-flow ProjectionMismanagementCash-Flow ProjectionCash-Flow Deficit

Question

Shortage of cash requiring corrective actions to avoid issues.

Select the correct term

  • Cash-flow Projection
  • Mismanagement
  • Cash-Flow Projection
  • Cash-Flow Deficit
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Solution

To address the shortage of cash requiring corrective actions to avoid issues, the most appropriate term from the options provided is "Cash-Flow Projection."

Explanation

  1. Cash-Flow Projection: This refers to a financial estimate that predicts future cash inflows and outflows over a specific period. It helps a business to anticipate its liquidity position and make informed decisions to address potential cash shortages.

  2. Mismanagement: This term implies improper handling of cash flow but does not specifically address the need for corrective action or prediction.

  3. Cash-Flow Deficit: This term describes a situation where cash outflows exceed cash inflows, but it’s more of a result rather than a proactive term used for forecasting.

Therefore, the most precise choice to accurately reflect a tool used to correct or manage potential issues concerning cash flow is Cash-Flow Projection.

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