Re: 10 Explain why a business with high 'sales revenue' might have a cash flow problem.
Posted: Wed Oct 08, 2025 12:37 am
[KN]Due to higher costs of the business.
[APP]For example, a retail store might incur significant expenses on rent, employee salaries, and marketing campaigns, even with high sales figures. These costs could deplete the business's cash reserves, making it difficult to cover immediate obligations.
[AN] Hence leading towards difficulties in paying suppliers or maintaining sufficient inventory, which could strain relationships and hinder operational efficiency.
[APP]For example, a retail store might incur significant expenses on rent, employee salaries, and marketing campaigns, even with high sales figures. These costs could deplete the business's cash reserves, making it difficult to cover immediate obligations.
[AN] Hence leading towards difficulties in paying suppliers or maintaining sufficient inventory, which could strain relationships and hinder operational efficiency.