Marj Ducie runs a profitable dance company. However, she is concerned about the latest cash flow forecast for the business. Marj used the following data to prepare her cash flow forecast:
Sales revenue: $12 000 in March; $10 000 in April; $9000 in May; $11 000 in June.
Payment from customers for sales are 50% paid for in cash and 50% paid for on one month's credit.
Direct costs: $5500 in April; $4950 in May, and $6050 in June.
Indirect costs are $5100 per month.
The opening cash balance in April is $1200.
Outline a possible reason why profitable firms might experience cash flow problems.