How to Improve Cash Flow
- Created by: Polly Devereux
- Created on: 08-05-13 10:38
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Cash Flow: the movement of money into and out of the business
Cash Inflows:
Comes from:
- customers who buy their products
- interest in bank accounts
- renting out of factory units
Cash Outflows:
Comes from:
- wages paid to workers
- raw materials
- admin - heating, insurance
- taxes - VAT, income tax
Financial management: deliberately changing monetary variables like cash flows to achieve financial objectives such as improved cash flows
Changing cash inflow
Increasing sales revenues:
- Usually most desired way to improve cash inflow
- Sales revenue - average product price x quantity sold
Destocking:
- Make a one-off reduction in stocks of finsihed products…
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