Cash Flow Management
Analyzing and managing the cash flows of a company is known as cash flow management. Cash flow on the other hand is an accounting statement. It shows the amount of cash a company has generated over a certain time period. Cash flow can be calculated monthly, semi – annually, quarterly and yearly. It helps a firm to analyses its financial strength.
The inflow of cash arises from investment, operations and financing. If some donations are made to the business, then this is also included in the cash inflows. On the other hand cash outflows are the expenses of a firm.
Cash flow management helps a company to determine what amount of cash is available to it whenever money is needed. Cash flow management also calls for the analysis of cash outflow and inflow. This tells whether the company has more cash in hand or less cash in hand.
If the business relates to personal finance, then cash flows are much important. They give all the records of the past happenings of a business like offering some service and future financial needs of the business that is what the business will be in future and what will be its financial requirements.
If a company has sufficient amount of capital in hand then it will be able to pay off the loans to creditors and will also be able to pay the wages of the employees in time. On the other hand, if a business does not have enough cash to discharge its expenses, then it might become bankrupt.
The business analysts use cash flow statements in order to measure the performance of a business in terms of finance. The companies that have enough cash at hand can create more cash by investing the available cash into the business. Hence, Cash flow management is much important.
- Debt ratios
- Liquidity ratios
- Profitability ratios
- Asset management ratios
- Cash Flow Indicator Ratios
- Market value ratios
- Financial analysis
- Business Terms
- Financial education
- International Financial Reporting Standards (EU)
- IFRS Interpretations (EU)
- Financial software
Most WantedFinancial Terms
- Most Important Financial Ratios
- Debt-to-Equity Ratio
- Financial Leverage
- Current Ratio
- Interest Coverage Ratio (ICR)
- Solvency Ratio
- Receivable Turnover Ratio
- Return On Capital Employed (ROCE)
- Debt Service Coverage Ratio
- Accounts Payable Turnover Ratio
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