Business Studies Finance- Qantas
1. Explain the strategies that Qantas and other businesses can use to control cash flow
Cash flow is the measure of money flowing in and out of your business at any given time. In an ideal business cycle, you will always have more cash flowing in than flowing out. The reality is however, that most businesses have to produce or deliver goods/services to their customers while also paying their staff and suppliers before they get paid themselves.
The task of managing cash flow is increased in complexity as the number of transactions and amounts of money involved grows, also resulting in greater impacts for the business if it is not managed well.
To effectively manage the businesses cash flow the business owner may introduce a cash flow management plan which is a strategic strategy that could keep the business running. This plan could list a series of steps in order to prevent the business reaching a cash crisis – meaning that they may not have the funds to pay all of their expenses such as wages. These steps could include; staying on top of the businesses bills and paying them immediately, asking for extended credit terms with suppliers, order less stock but more often to avoid stock wastage, chase debts promptly and firmly and finally review the profitability of the businesses selling prices. These small steps could be what prevents hardships for the business and keeps it successful.
Qantas and every other business could also develop a strategic cash flow management plan to avoid cash crisis. Qantas could also introduce discounted tickets frequently to attract more customers more often and to compete with other airlines. If Qantas lowers the cost of their tickets, it would force the other airlines into lowering their prices or coming up with a better deal to stop Qantas from having the upper hand of the market place. Although lowering ticket prices means that Qantas won’t make as much profit on that ticket as they usually would, it is likely that they will gain
Cash flow is the measure of money flowing in and out of your business at any given time. In an ideal business cycle, you will always have more cash flowing in than flowing out. The reality is however, that most businesses have to produce or deliver goods/services to their customers while also paying their staff and suppliers before they get paid themselves.
The task of managing cash flow is increased in complexity as the number of transactions and amounts of money involved grows, also resulting in greater impacts for the business if it is not managed well.
To effectively manage the businesses cash flow the business owner may introduce a cash flow management plan which is a strategic strategy that could keep the business running. This plan could list a series of steps in order to prevent the business reaching a cash crisis – meaning that they may not have the funds to pay all of their expenses such as wages. These steps could include; staying on top of the businesses bills and paying them immediately, asking for extended credit terms with suppliers, order less stock but more often to avoid stock wastage, chase debts promptly and firmly and finally review the profitability of the businesses selling prices. These small steps could be what prevents hardships for the business and keeps it successful.
Qantas and every other business could also develop a strategic cash flow management plan to avoid cash crisis. Qantas could also introduce discounted tickets frequently to attract more customers more often and to compete with other airlines. If Qantas lowers the cost of their tickets, it would force the other airlines into lowering their prices or coming up with a better deal to stop Qantas from having the upper hand of the market place. Although lowering ticket prices means that Qantas won’t make as much profit on that ticket as they usually would, it is likely that they will gain