Step 3: Identify the primary cause of the cash-flow problem. Step 1: Determine if the current cash-flow shortage is short or long term.

There is a simple three-step approach to diagnosing a cash-flow problem. Long-term problems require significant business adjustments to correct and, if left uncorrected, have the potential to result in business failure. The distinction between the two is important. Your first step is to determine if the problem is short or long term. This may indicate a temporary short-term problem (such as a poor growing season) that will correct itself in time, or it may indicate a more serious long-term problem. Most farm businesses become aware of potential financial problems when cash flow becomes tight and obligations become increasingly difficult to meet in the short and medium term. Early diagnosis gives you more time to make decisions and more options to correct cash-flow issues concerning your farm business.

The sooner you can diagnose the problem, the better. This factsheet is designed to help you diagnose a cash-flow shortage and take some steps toward correcting it. While all business owners hope their businesses will never have financial problems, in reality, most businesses experience financial pressure at some point. As part of providing accessible customer service, please email the Agricultural Information Contact Centre ( if you require communication supports or alternate formats of this publication.

Analyzing cash flow