 |
| | | |
|
Free Project Management Template Article
| What is Cash Flow? |
| By: John Mussi |
Ever wondered what is cash flow? Understanding the basic concepts of cash flow will help you plan for the unforeseen eventualities that nearly every business faces. Although poor management is normally given as the main cause for business failure, poor cash management is running a close second as a common stumbling block.
Cash is ready money in the bank or in the business. It is not inventory, it is not accounts receivable (what you are owed), and it is not property. These can potentially be converted to cash, but can't be used to pay suppliers, rent, or employees. Profit growth does not necessarily mean more cash on hand. Profit is the amount of money you expect to make over a given period of time. Cash is what you must have on hand to keep your business running.
Cash flow refers to the movement of cash into and out of a business. Watching the cash inflows and outflows is one of the most pressing management tasks for any business. The outflow of cash includes those cheques you write each month to pay salaries, suppliers, and creditors. The inflow includes the cash you receive from customers, lenders, and investors.
There are two types of cash flow, positive and negative. Positive cash flow means, if its cash inflow exceeds the outflow, a company has a positive cash flow.
Conversely, negative cash flow means, if its cash outflow exceeds the inflow, a company has a negative cash flow. Reasons for negative cash flow include too much or obsolete inventory and poor collections on accounts receivable.
Cash flow can be broken down into three sections:
Operating cash flow: often referred to as working capital, is the cash flow generated from internal operations. It comes from sales of the product or service of your business, and because it is generated internally, it is under your control.
Investing cash flow: is generated internally from non-operating activities. This includes investments in plant and equipment or other fixed assets, nonrecurring gains or losses, or other sources and uses of cash outside of normal operations.
Financing cash flow: is the cash to and from external sources, such as lenders, investors and shareholders. A new loan, the repayment of a loan, the issuance of stock, and the payment of dividend are some of the activities that would be included in this section of the cash flow statement.
Good cash management is simple. It involves:
Knowing when, where, and how your cash needs will occur
Knowing the best sources for meeting additional cash needs
Being prepared to meet these needs when they occur, by keeping good relationships with bankers and other creditors
The starting point for good cash flow management is developing a cash flow projection to help them develop the necessary capital strategy to meet their business needs.
You may freely reprint this article provided the author's biography remains intact:
About the Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the www.directonlineloans.co.uk website.
|
|
| Keywords: negative cash, although poor management, poor cash management, management, cash, management is normally, cash flow, projection, cash management, project management |
Project Management News
Helpful Free Project Management Template Links
Online Web Based Project Management and Tracking - iTeamwork.com
Offering a free online project management and task tracking application with e-mail notification. ... Team Project Management. Sign-In ... iTeamwork for your project management needs free of charge, but... .com is a free, online, web-based team project management application that you ...
AtTask (@task) - Project Management Template
... Project Management Template. Project Management Template ... 801-373-3266 (toll-free 866-441-0001). Email: information 'at' attask.com ...
Project Management Templates Documents and Free Forms
Project Management document templates, forms and processes with Free Guide, Risk Tools and resources to help you achieve project management success. ... Our Project Management templates include helpful hints, real-life examples, charts and tables to ... Offer a FREE Guide Book and Risk Tools. Template Kits. Project Management Kit ...
Excel/VBA Help. - Project Management Template
Excel Help. Free Excel Help & Support Forum. Want Free Excel Help? ... Help & Excel VBA Help | ALL Software up to $139.00 of FREE SOFTWARE! | EXCEL CONSULTING FREE QUOTE ...
Project Plan Template
Index of free project management articles and tools on this website ... template as a step-by-step guide to planning with measured achievements as detailed in our Achievement-driven Project Management ... Project®. The Project Management ...
Project management articles tools, templates & techniques
Project management resource site with hundreds of free articles, tools & templates and E-learning university certifications for PMs at all experience levels. ... Project Management Tools & Techniques. Free PM Digital Desktop; Definitions, techniques & MS ... across Functional lines. Project manager's authority template. Behavior analysis template ...
Project Plan - Information In Free Online Encyclopedia: TheFreeDictionary.com
Info about Project plan. A project plan is a management product created as a result of the project...Find thousands of free online definitions and reference guides at TheFreeDictionary.com.
Project Management Templates
... Template Store. Project Management Templates - Coming soon ... ASQ defines Project management as "The application of ... of the particular project. Project management knowledge and practices ...
Project management - Wikipedia, the free encyclopedia
Over $105,000 has been donated since the drive began on 19 August. Thank you for your generosity! Project management. From Wikipedia, the free encyclopedia. ... Project management is quite often the province and ... Guide to the Project Management Body of Knowledge (PMBOK ...
Business - Project Management - FREE Downloads
Project Planning and Management - The Project Planning and Management template is designed as a generic, affordable, Excel based solution to plan and manage any project. The ability to build the project's budget as tasks are ide...
|