A finance manager has to acknowledge that, the amount of cash an organization is holding can be affected by a number of unforeseen events. Some of these events include:
- New competitors and/or new products may negatively affect demand for a company’s products;
- Change in consumptions habits, increasing health awareness against sugary products;
- Increase in the interest rate can lead to a reduction in the amount of cash available to the firms that are net borrowers;
- Depreciation of the currency for those organizations that engage in international trade can lead to a change in cash availability of the organization;
- Strikes and other disasters that halt production can cause shortages due to a fall in sales volumes.