Cash Flow Analysis

Cash flow planning is vital for survival of your business

Cash flow statement is one of the most important financial statements because it reveals the financial health of your business and whether it’s able to meet its financial obligations.

It shows money paid in and out, and in case your business has only one bank account, its cash flow statement will equal its bank statement for any given period.

Cash deficit

If your buyers don´t pay you on time, you may experience cash deficit and be unable to pay rent or buy materials for the next production cycle. Or, during low season, you may lose key employees due to lack of cash for their salaries. Cash flow planning and analysis help reduce liquidity risk and enable you to take action on time by building cash reserves, shifting timings of some transactions, selling assets or borrowing cash.

Surplus cash

Cash flow analysis can also identify periods with surplus cash, which can be invested to earn additional revenue, or used to reduce debt and build cash reserves.

Is your business financially healthy?

If you always struggle to meet your financial obligations, it´s a sign that your business needs a financial health check, to identify reasons behind the cash shortages and look into ways for improving your cash flow.

To prevent more serious liquidity problems, contact us at finance@mcboffin.com or request a free quote.

Our cash flow analysis can include

  • Cash Flow from Operations – Analysis of accounts receivable, accounts payable and income taxes payable.
  • Cash Flow from Investing – Analysis of property and equipment sales and purchases, business acquisitions, etc.
  • Cash Flow from Financing – Analysis of bank loans, overdrafts, credit cards, etc.
  • Working Capital Analysis – That is necessary to facilitate day-to-day transactions.
  • Free Cash Flow Analysis – To evaluate potential for dividend payments, building cash reserves, etc.

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