Cash Me If You Can

AQA A-Level Business (2026) | Unit 3.1.4 Financial management
Balance Sheet Extract
CURRENT ASSETS
Receivables £95,000
Inventory £65,000
Other Current Assets £20,000
(includes prepayments, deposits)
Total Current Assets £180,000
CURRENT LIABILITIES
Bank Overdraft (£8,400)
Payables (£45,000)
(Malt & Hops supplier payment)
Payroll Due (£38,000)
Other Current Liabilities (£82,000)
(tax, other suppliers, accruals)
Total Current Liabilities (£173,400)
Liquidity Ratios
Current Ratio
Current Assets ÷ Current Liabilities
£180,000 ÷ (£173,400)
1.04 : 1
Liquid Capital Ratio
(Current Assets - Inventory) ÷ Current Liabilities
(£180,000 - £65,000) ÷ (£173,400)
£115,000 ÷ (£173,400)
0.66 : 1
URGENT: Board Meeting - Monday 8:47am

You're the office manager at BrewCraft Ltd, a growing craft brewery founded by Cole Lateral and Phil de Gapp. You are responsible for managing the finances of the business. You've just opened your laptop to find this:

"Your account went £8,400 overdrawn yesterday without authorization. You have no overdraft facility in place. We've temporarily allowed this pending our meeting, but your limit is £10,000 maximum. We need immediate action. Meeting scheduled 2pm today."

You check the dashboard... and your stomach drops. 💀

BrewCraft Ltd - Financial Dashboard
Cash Balance: -£8,400 (UNAUTHORISED)
Current Assets: £180,000
Current Liabilities: (£173,400)
Supplier payment due: TODAY (£45,000)
Payroll due: Friday (£38,000)
What do these numbers mean?

Current Assets: Everything you own that can turn into cash within a year (cash, stock, money customers owe you)

Current Liabilities: Everything you owe that must be paid within a year (shown in brackets)

The Problem: You can't pay the £45,000 due today without going further overdrawn!

The Problem

BrewCraft is profitable and growing - but growth ties up cash. You hold stock (inventory) and customers owe you money (receivables). Customers pay in 60 days, but suppliers want payment in 30 days.

Key concept: Cash flow ≠ Profit. You can be profitable but run out of cash to pay bills.

This simulation has been developed by tutor2u as part of a suite of free teaching resources to support the new AQA A-Level Business specification (first teaching Sept 2026).

⚡ WEEK 1: CRISIS - Monday Morning
The £45,000 Payment - Due by 5pm TODAY

It's 9:00am. The £45,000 supplier payment to Malt & Hops is due by 5pm TODAY. Your current balance won't cover it - you'd go to -£53,400 (way beyond your £10,000 limit).

The bank could freeze your account. What do you do?

Current Position
💰
Cash Balance
-£8,400
📊
Current Ratio
1.04 : 1
🤝
Supplier Relationship
100/100
🏦
Bank Confidence
100/100
How is Current Ratio calculated?
Current Ratio = Current Assets ÷ Current Liabilities
= £180,000 ÷ (£173,400)
= 1.04 : 1

What it means:

  • Below 1.0 : 1 - Can't pay short-term debts
  • 1.0 : 1 to 1.5 : 1 - Adequate but tight
  • 1.5 : 1 to 2.0 : 1 - Healthy

Your 1.04 : 1 means: You can just about cover debts, but there's no safety margin!

🍺 Cole Lateral
Co-Founder (Growth-Focused)
"Factor it! £6,000 fee is nothing if it keeps us growing. Get the cash NOW and pay the supplier. We can't afford to look weak."
📊 Phil de Gapp
Co-Founder (Risk-Averse)
"That's a 12% fee! Call Sarah first. She's been our partner for 3 years - she'll work with us. Let's not throw away £6,000 in a panic."
Option A: Negotiate Extension
"Call Sarah at Malt & Hops. Ask for 30 more days to pay."
Immediate Effects:
Breathing room: 30 days
Supplier relationship: -10 points
Cost: £0
Risk: They might say no
Option B: Use Debt Factoring
"Sell £50,000 of customer invoices for immediate cash."
Immediate Effects:
Cash today: £44,000 (88% of invoice value)
Cost: £6,000 in fees
Can pay supplier on time
Stays within overdraft limit
Debt factoring: Selling customer invoices to a third party for immediate cash at a discount.
Option C: Offer Payment Plan
"Pay £20,000 now, £25,000 in 2 weeks."
Immediate Effects:
Pay now: £20,000
Remaining debt: £25,000 in 2 weeks
Supplier relationship: -5 points
Will be tight for Friday payroll
Option D: Don't Pay Today
"Keep the cash for payroll. Staff must be paid."
Immediate Effects:
Supplier relationship: -25 points
Risk: Legal action, supply stopped
Keep cash for wages
Bank will view negatively
Ethics: Legal but damages trust. Is this fair to your supplier?