Both Cash Flow Statement and Cash Flow Forecast only deal with cash. All firms should engage in forecasting theirs cash flows.
Posts published in “FINANCE”
Let’s take a closer look how Cash Flow, investment and profit are interlinked with each other in a business organization.
Cash and profit are important. However, businesses often fail because they do not understand the difference between cash and profit.
Cash Flow shows movements of cash within a business. Cash Flow relates to the timing of payments – receiving cash and spending cash.
In order to ensure that business managers have the complete picture of a firm, considering other qualitative factors is a must-to-do job.
Investor Ratios measure how attractive public limited companies are investors. Dividend Cover is one of them.
Interest Cover measures how many times a business could pay its Interest on the borrowed capital out of its Net Profit Before Interest and TAX.
Gearing measures how much of the capital employed in a business is financed by long-term debt, or Long-term Liabilities.
Creditor Days measures the average number of days it takes a business to pay its suppliers who gave the business trade credit.
Debtor Days measures the average number of days it takes a business to collect money from its customers who bought products on trade credit.
Stock Turnover shows the number of times a business sells its stock within one year, and the number of days it takes to sells all its stock.
Quick Ratio (Acid-Test Ratio) is ratio between the most liquid assets and Current Liabilities. It deals with the firm’s most liquid assets.