Welcome to English as a Second Language podcast number 668, Having Cash Flow Problems.
This is English as a Second Language podcast episode 668.
I'm your host, Dr Jeff McQuillan, coming to you from the Center for Educational Development in beautiful, a little rainy but otherwise beautiful Los Angeles, California.
This episode, like all of our episodes, has a learning guide.
Go to our website at eslpodcom.
Download it.
You'll improve your English much faster by having a transcript vocabulary and additional cultural and vocabulary information included in the guide.
This episode is about business.
It's about something called cash flow.
Let's get started.
I've just crunched the numbers and we're not going to be able to meet payroll next month because of cash flow problems.
That can't be.
The cash flow projections from last month showed that we'd be fine.
We didn't anticipate a shortfall in income this month and didn't set aside enough cash to hedge against a cash flow problem.
What can we do?
We need a stopgap solution now.
Well, we could try to extend our line of credit at the bank.
We're already overextended at the bank.
I don't want to push our luck.
Do you really think we can hold them off for that long?
Kylie begins our dialogue by saying to Miguel, "...I've just crunched the numbers."
And we're not going to be able to meet payroll next month because of cash flow problems.
To crunch C-R-U-N-C-H.
The numbers means to make a calculation, to add subtract, multiply or divide to get an answer or a result.
Usually we use this expression in business when we are talking about the cost of something or how much money the company will have at the end of the year.
We crunch the numbers.
We do the calculations to see.
Payroll, P-A-Y-R-O-L-L, is a general term to describe the money that is paid to the employees.
To meet payroll means you have enough money to pay for the people who work for you.
So if you're a company and you can't meet payroll, well then your employees won't get paid and they probably will stop working as well.
Cash flow is also called by a more technical name liquidity flow.
L-I-Q-U-I-D-I-T-Y.
You may recognize the word liquid.
It's something that, like water, can move easily.
Cash flow refers to the amount of money a company has to pay its bills and other expenses, without considering how much the company has invested.
So, for example, if you have a company that sells I don't know cats, let's say, and you have 50 cats that you are trying to sell, the cats can't be given to your employees as payment.
Well, you could give them, maybe as a punishment.
But cats are what we call an asset.
A-S-S-E-T.
An asset is something that you own but that you can't use for something else, like paying bills or paying your employees, or Cash flow refers to money in a bank or money that you have in cash or in a check, something that represents cash that you can use to pay other people with.
So a company needs to be bringing in enough money, enough cash, so that it can pay its expenses.
If you don't do that, well, then you have a cash flow problem.
Kylie and Miguel have a cash flow problem.
She's crunched the numbers and they're not going to be able to meet payroll next month.
Miguel said, that can't be, that cannot be correct, is what he means.
The cash flow projections from last month showed that we'd be fine.
A projection is also called a forecast.
It's a guess about what is going to happen in the future.
We would call it an educated guess, meaning you have some information.
It's not just random.
You have some information on which your projection is based.
Kylie says, we didn't anticipate a shortfall in income this month.
To anticipate, in this case, means to believe that something will happen in the future.
We might also say to foresee.
I anticipate that it will rain tomorrow because there are clouds in the sky.
That's my belief, my expectation.
Kylie says their company did not expect a shortfall in income.
A shortfall, one word, is when you don't have enough of something that you need.
We might also call it a shortage or a lack, L-A-C-K.
Well, this is a shortfall in income.
That is, money that the company gets from selling, in this case, its cats.
So Kylie says we didn't anticipate a shortfall in income this month and didn't set aside enough cash to hedge against a cash flow problem.
Let's start with the expression to set aside, which is a two-word phrasal verb meaning to decide, to save part of what you have now.
We might say to reserve it.
I have $100, and I don't have any bills to pay today, but next month.
I'm going to have to buy my wife a present.
And no, it will not be a cat.
I set aside $95 because I'm a loving husband.
And of course, I would give my wife the best possible.
Right, honey?
So I put $95 aside.
And that is what I will save today.
So I can buy something next month.
Unfortunately, Miguel and Kylie are not perhaps the best business people.
They didn't set aside enough cash to hedge against a cash flow problem.
To hedge, H-E-D-G-E, means to protect yourself against certain risks, especially financial risks.
To do something that will reduce a potential, a possible problem in the future, especially when we're talking about money.
We have a common expression to hedge your bets.
That means you wouldn't want to bet all of your money on one thing or gamble, risk your money on one thing.
To hedge your bets means to set aside extra money in case things don't go as well as you planned.
That's something Kylie and Miguel didn't do.
Miguel says, what can we do?
We need a stopgap solution now.
Stopgap, S-T-O-P-G-A-P, one word, is is a temporary solution, a temporary fix.
It won't solve the problem permanently, forever, but it will fix it for now.
You have a lot of cats and you don't have room for them in your store.
So you ask your neighbor if he can keep ten of your cats at his house just until you get enough room to bring them back to your store.
That's a stopgap measure.
A stopgap solution.
Kylie says well, we could try to extend our line of credit at the bank.
A line of credit is another word for alone.
Alone is when someone gives you something like money and says you have to give it back in the future, in a year or two years, whenever.
In addition, you have to pay that person some additional money for being able to use their money today.
Well, A line of credit is when a bank says you can use this money whenever you want.
You don't have to take it now.
When you need it you can take it.
Miguel says we're already overextended at the bank.
To overextend means to have too many loans, too many debts we would say D-E-B-T-S, where you have to give other people money you have borrowed from them.
That's what happened to Kylie and Miguel.
He says, I don't want to push our luck.
To push your luck means to try to get too much of a good thing, to try to take advantage of a situation that may put you in a worse position in the future.
You may have had good luck before, good fortune before, But there's no guarantee that will continue.
So, for example, if you have a gun and you put four bullets in the gun and you shoot the gun and no bullets come out, you have been very lucky.
You don't want to push your luck by continuing to try to shoot the gun.
Because you may hurt someone or kill someone.
Kylie says the other option, the other possible solution, is to hold off on paying our suppliers.
To hold off on is sort of a three-word phrasal verb.
It means to postpone or delay something.
To decide not to do something now, but instead do it in the future.
I'm going to hold off on buying a new car until the prices are lower.
They want to hold off on paying their suppliers less.
I should mention that hold has many different meanings in English, as does the word hedge, and you can find those additional meanings in our learning guide.
A supplier is someone who sells your company something, a product, a good or a service.
We would call it.
So whoever sells Kylie and Miguel cats is a supplier.
Kylie says, we can hope that our income goes up next month as predicted, meaning as expected.
Miguel says, do you really think we can hold them off for that long?
Do you really think we cannot pay them for a whole month?
Kylie says I'll have to talk with our biggest suppliers and the company that gives them the most or sells them the most things that they use and give them assurances that they'll get paid.
To give someone assurances means to tell them things that will make them feel confident that something will happen, to tell them that everything is going to be okay.
They don't have to worry about it.
The word assurances comes from the verb to assure A-S-S-U-R-E, which means the same thing really to tell someone that it's going to be okay, you're going to have more money next month, and so forth.
Kylie says, let's just hope they're not having cash flow problems of their own.
Meaning, maybe the suppliers, if you don't pay them, will have their own cash flow problems.
Now let's listen to the dialogue, this time at a normal speed.
I just crunched the numbers and we're not going to be able to meet payroll next month because of cash flow problems.
That can't be.
The cash flow projections from last month showed that we'd be fine.
We didn't anticipate a shortfall in income this month and didn't set aside enough cash to hedge against the cash flow problem.
What can we do?
We need a stopgap solution now.
Well, we could try to extend our line of credit at the bank.
We're already overextended at the bank.
I don't want to push our luck.
The other option is to hold off on paying our suppliers and hope that our income goes up next month, as predicted.
Do you really think we can hold them off for that long?
I'll have a talk with our biggest suppliers and give them assurances that they'll get paid.
Let's just hope they're not having cash flow problems of their own.
We always anticipate a good script here on ESL Podcast.
And we got one today, as expected, from our own Dr. Lucy Say.
Thank you, Lucy.
From Los Angeles, California, I'm Jeff McQuillan.
Thank you for listening.
Come back and listen to us again here on ESL Podcast.
English as a Second Language podcast is written and produced by Dr Lucy Say, hosted by Dr Jeff McQuillan.
Copyright 2011 by the Center for Educational Development.
