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An entrepreneur meets the profit target but lacks available cash because customers pay late. Which function was weak?

Answer and explanation

Correct answer: Cash flow management

Cash flow management is correct. A business may record a profit, but if customers do not pay on time, it may not have cash available immediately for wages, rent, or suppliers. Quality control concerns product standards, whereas this situation is about the timing of receipts and payments. Exam tip: distinguish profit from cash flow; earning a profit does not always mean that cash is available.

Related tags

Cash Flow ManagementWorking CapitalLate Customer PaymentsEntrepreneurial FunctionsFinancial PlanningQualities And Functions Of An EntrepreneurEntrepreneurial Skills IArtificial Intelligence

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