If your _________ shows a large lag between when sales are booked and revenue is collected you may want to restructure how you collect payments.
A) Cashflow
B) P&L
C) Balance Sheet
D) Business Plan

Question

Quizplus · Accepted Answer

Cashflow represents the timing of cash inflows and outflows in a business. If there is a significant lag time between when sales are made and when revenue is collected, it can impact a company's cashflow and ability to meet financial obligations. Therefore, it may be necessary to restructure payment collection methods to improve cashflow. P&L (profit and loss statement) shows the revenue, expenses, and profit/loss of a company over a specific period of time. The balance sheet provides a snapshot of a company's assets, liabilities, and equity at a specific point in time. The business plan is a strategic document outlining a company's goals, objectives, and plans for achieving them. While all of these financial documents are important for managing a business, only the cashflow statement is directly relevant to addressing the issue of delayed revenue collection.

If Your _________ Shows a Large Lag Between When Sales