When we start a consulting engagement with a new client, one of the first tools we implement is the Daily Cash Report. While the concept is simple, the results can be very powerful. If you’ve ever realized on Thursday afternoon that you don’t have enough cash for Friday’s payroll, then you know exactly what I
This time last year, we posted a survey asking you what business issues were causing you to lose the most sleep: 1) lack of training, 2) turnover, 3) cash flow, 4) managing growth, or 5) losses or declining profits. We tallied the results as of June 2014 and posted them on our blog. We also
Check out the following 5 ways a CFO adds value and how they can take their role to the next level – gaining more respect, increasing salary, etc. Ways a CFO Adds Value 1. The CFO Enables the Company to Grow Faster CFO responsibilities include the following: Formulating and implementing financial strategies Managing the company’s
As a business owner, I often find myself lying awake at night worrying about issues my company is facing. Are we making as much money as we should be? How is my cash flow? Do I have the right team to grow the business? These are just a few of the questions that cause me
See Also: Operating Income (EBIT) Free Cash Flow Analysis Cash Flow vs Net Income What is Cash Flow? Cash flow is the blood of a business. It is the measure of what cash is coming in and what is leaving. Cash flow is a more accurate measure of whether a company has enough capital to
Over time weeds grow in any garden. In the same way, unprofitable customers work their way into your company. To avoid the high costs of low profit customers, you should perform an annual analysis of customer profitability. Therefore, weed your garden of customers who are sapping your profits and cash flow. Although there are many
What is the impact of reducing your cash conversion cycle? Is it worth the effort? In order to quantify the benefit of reducing your cash conversion cycle, it’s important to understand exactly what it is. Definition of Cash Conversion Cycle Cash Conversion Cycle is a metric that expresses the length of time, in days, that it
Effectively managing cash flow is an issue that all businesses face, whether they have plenty of cash or are experiencing a cash crunch. Cash is the lifeblood that fuels current operations and allows for growth, so developing a strategy to manage this most important asset is key. Effectively Managing Cash Flow So how do you
Operating Cycle Definition The Operating cycle definition establishes how many days it takes to turn purchases of inventory into cash receipts from its eventual sale. It is also known as cash operating cycle, cash conversion cycle, or asset conversion cycle. Operating cycle has three components of payable turnover days, Inventory Turnover days and Accounts Receivable
See Also: Net Present Value versus Internal Rate of Return Discounted Cash Flow Analysis Internal Rate of Return Method Net Present Value Method Free Cash Flow Analysis Discounted Cash Flow vs IRR A lot of people get confused about discounted cash flow vs IRR and its relation or difference to the net present value (NPV)
See Also: Cash Flow Statement Track Money In and Out of a Company Cash Flow Projections Cash is in Your Business Thirteen Week Cash Flow Report The Daily Cash Report The Daily Cash Report is used to report on the daily cash balance and to help manage cash on a weekly basis. When entering a
See Also: Relationship With Your Lender What Does a Lender Want to Know Don’t Tell Your Lender Everything Due Diligence on Lenders Finding the Right Lender What Lenders Look At? I recently spoke to students at the University of Houston in the Wolff Center for Entrepreneurship on the topic of Dealing with Lenders. During the
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