Skip to content

CMA Final · Entrepreneurship and Startup · Risk Management Strategies

A SaaS startup in Hyderabad has a base-case annual operating cash inflow of ₹60 lakh and fixed cash outflows of ₹45 lakh. Founders run a scenario in which revenue falls so that inflow drops 30% while fixed outflows stay unchanged. What is the cash result under this stress scenario, and what does it imply?

Under the stress scenario, inflow falls by 30% to ₹42 lakh against fixed outflows of ₹45 lakh, giving a shortfall of ₹3 lakh. The result implies the startup should arrange a liquidity buffer or committed funding to withstand such a downturn.

  1. ASurplus of ₹3 lakh; no action needed
  2. BShortfall of ₹3 lakh; plan liquidity buffer or fundingCorrect
  3. CShortfall of ₹15 lakh; the startup must shut down
  4. DShortfall of ₹18 lakh; plan liquidity buffer or funding

Explanation

Inflow falls 30% of 60 lakh = 18 lakh, giving 42 lakh. Fixed outflow is 45 lakh, so the result is a shortfall of 3 lakh. This shows the need for a liquidity buffer or committed funding. The 18 lakh option wrongly treats the fall in inflow as the shortfall, ignoring the original 15 lakh surplus.

Did you get it right without looking?

One question tells you little. A timed set on Risk Management Strategies shows your real accuracy, how long you take and where you lose marks.

Practise Risk Management StrategiesFree diagnostic mock

More Risk Management Strategies questions