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Cash Flow ManagementCash Flow Management
Cash RunwayCash Runway
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Cash Runway

Definition

Measuring how long the current cash will last at the current spending rate. Knowing this helps plan when to secure more funds or reduce expenses.

What to consider

  • Conduct market research before setting prices.
  • Consider both cost and value delivered.
  • Be ready to adjust prices as market conditions change.

Real world scenarios

  • A retailer in Miami adjusts product prices after analyzing competitor rates and customer demand.
  • An online seller tests various price points through A/B testing to maximize sales.
  • A service provider offers tiered pricing for different service packages.

Related terms

Profit Reinvestment
Sales Tax
Economic Value Added
Accounts Payable
Sales Forecasting

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