What a business makes to generate cash

Why cash is important to a business

Required informationSkip to questionHardware House: Finding Sources of Cash for Expansion This activity is important because if you decide to start your own business, you may be faced with difficult decisions regarding how to structure the ownership of that business. While the majority of businesses operate as a sole proprietorship, many grow beyond the capability of a sole proprietorship and evolve into a different type of ownership. For example, companies often need to evolve their ownership in order to acquire cash necessary to expand the business. The goal of this exercise is to demonstrate your understanding of the different ways that businesses can be organized. Read the case of describing the growth of a small start-up manufacturing organization and answer the questions that follow. Case:Doug Datner had an eclectic background. He completed his law degree from the University of Virginia, then went to work for a technology start-up in Dubai. After the start-up was purchased by a larger corporation, affording Doug a hefty sum of money, Doug and his spouse returned to the United States. While working with an architect and a designer to build their dream home, they realized that there was not a provider of high-quality custom-made door and window hardware at a reasonable price point in the United States. Even though Doug had no experience in the field, he decided to start a business manufacturing high-quality custom-made door and window hardware. He named the company Hardware House. Doug and his wife cleared space in their newly constructed garage, designed several basic prototypes, and hired a metalwork expert to replicate their prototypes. They decided to have a few designs in catalog as one component of their business, but have the capability to alter those designs to provide designers with custom hardware.  The first few years were tough. Business was steady enough to hire a second metalwork expert, but cash flow challenges often made Doug worry whether he would be able to pay his metalwork experts on time. Still, the Hardware House had gained a number of consistent clients, and was able to move into an old warehouse space and expand operations. Ten years later, Hardware House has nearly 100 employees. While the majority of the employees work in manufacturing, there are also employees in marketing, design, accounting, and human resources. Doug structured the business to limit his liability in case of lawsuit but still managed to maintain the business without sharing ownership.  Doug has determined that the most advantageous way to acquire cash is to sell stock to public markets. Doug will need to file which of the following? Multiple Choiceinitial public offeringarticles of partnershiparticles of incorporationlimited liability corporationquasi-public corporation

Revenue can be generated by: a. raising capital, b. investing in productive resources, c. paying dividends. Group of answer choicesinvesting in productive resourcesmanaging solvencyreducing liquidityminimizing enterprise value

What do you think is the difference between cash sales and sales revenue? Are they the same thing

Analyse two reasons for a profitable business running out of cash.