Children's arithmetical difficulties are often explained in terms of a short-term memory deficit. However, the underlying cause of this memory deficit is unclear, with some researchers suggesting a slow articulation rate and hence increased decay of information during recall, while others offer an explanation in terms of slow speed of item identification, indicating difficulty in retrieving information stored in long-term memory. General processing speed is also related to measures of short-term memory but has rarely been assessed in studies of children's arithmetic. Measures of short-term memory, processing speed, sequencing ability, and retrieval of information from long-term memory were therefore given to 7-year-old children. When reading ability was controlled for, arithmetic ability was best predicted by processing speed, with short-term memory accounting for no further unique variance. It was concluded that children with arithmetic difficulties have problems specifically in automating basic arithmetic facts which may stem from a general speed-of-processing deficit.