What does cash deficiency mean?

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Cash deficiency arises when firm/company fails to meets its cash disbursements with its cash receipts in a fiscal year.

An arrangement in which a party provides a firm with funds to cover any shortfalls arising from capital or cash flow restraints, allowing the company to service its debt. A deficiency agreement will usually have a cumulative limit specified by the lending party

It is the amount with which cash disbursements is greater than cash collection

The poor management skill of the finances. But it could happen as all of a sudden investment or surprising expenses.

It actually means you don't have enough funds for the operating costs.

It means lack of cash due to lack  or defects in management itself. This could due to many reasons like;

1- Purchasing too much fixed assets  without studying

2- Bad collection policy

3- Too much general and operational expense..

 

there are many others in fact, that needs a good financial manager to manage .

 

Thank You for the invitation.

Deficiency Agreement is an agreement in which a party provides a firm with funds to cover any shortfalls arising from capital or cash flow restraints'allowing the company to serve its debt _It is often used in construction