NEXT TO PAGE 3 Funny Video Of a Dancing Baby Funny Picture, Video, wallpaper, games Free Study Material For Student Free Tips How To Earn Money Online Without Any Investment Earn Online Money Back TO HOME Cash Flow Statements As a component of implementing an effective cash management program, the management must prepare a cash flow statement, also called a cash budget. Cash budgeting involves the estimation of cash receipts and cash disbursements to determine cash availability. A management can best identify the municipality's major cash items by examining an annual budget, payment and collection records and past cash flow patterns. Let us discuss the parts of cash flow statements WHAT IS CASH?
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 might be converted to cash at some point in time, but it takes cash on hand or in the bank to pay suppliers, to pay the rent, and to meet the payroll. Profit growth does not necessarily mean more cash -- as we will see. . WHAT IS CASH FLOW?
Cash flow simply refers to the flow of cash into and out of a business over a period of time. Watching the cash inflows and outflows is one of the major management tasks of an owner. The outflow of cash is measured by those checks you will write every month to pay salaries, suppliers, and creditors. The inflows are the cash you receive from customers, lenders, and investors. POSITIVE CASH FLOW
If the cash coming "in" to the business is more than the cash going "out" of the business, the company has a positive cash flow. A positive cash flow is very good and the only worry here is what to do with the excess cash. Like good health, a positive cash flow is something you're most aware of if you don't have it. NEGATIVE CASH FLOW
If the cash going "out" of the business is more than the cash coming "in" to the business, the company has a negative cash flow. A negative cash flow can be caused by a number of reasons. For example: too much or obsolete inventory or poor collections on your accounts receivable (what your customers owe you) can cause you to be short of cash. If the company can't borrow additional cash at this point, the company may be in serious trouble. WHAT ARE THE COMPONENTS OF CASH FLOW?
A Cash Flow Statement is typically divided into three components so that you can see and understand the sources and uses of cash. These components include internal and external sources: Operating Cash Flow
Operating cash flow, often referred to as working capital, is the cash flow generated from internal operations. It is the cash generated from sales of the product or service of your business. It is the real lifeblood of your business, and because it is generated internally, it is under your control. NEXT TO PAGE 3 Funny Video Of a Dancing Baby Funny Picture, Video, wallpaper, games Free Study Material For Student Free Tips How To Earn Money Online Without Any Investment Earn Online Money Back TO HOME
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