1 / 15

From Profit to Cash: Managing Cash Flow for Business Success

Learn how to analyze and manage your cash flow effectively, forecast future growth, and avoid common cash flow mistakes. Understand the four forces that impact your cash flow and develop a cash flow management plan that works for your business.

rkrieg
Download Presentation

From Profit to Cash: Managing Cash Flow for Business Success

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Money Day From Profit to Cash: Over the River and Through the Woods

  2. Session Objectives After completing this session, you will be able to: • Define the four forces that affect your cash flow • Apply a cash flow model to your business and analyze the results • Develop a cash flow management plan that works for you

  3. From Profit to Cash… The problem with cash flow is that it lags behind profit for most businesses.

  4. Activity #1 Populating the Cash Flow Model

  5. Activity #1 Summary • Forecast profitability first, then the cash flow impacts of that profitability second. • Once you forecast cash flow, you can begin to manage it. • Use the levers in the model to see future growth.

  6. Break • 10 Minutes

  7. The Four Forces of Cash Flow Cash Flow Force # 1: Pay Taxes Cash Flow Force # 2: Pay Down Debt Cash Flow Force # 3: Build to a Core Capital Target Cash Flow Force # 4: Pay Profit Distributions Ka-Ching!

  8. Activity #2 Forecasting Cash Flow

  9. Maximizing Cash Flow • Impact of Terms • Impact of increasing / decreasing margin • Increasing LER • Eliminating Non-value added expenses • Discuss Value vs. Non-Value added spreadsheet

  10. Activity #2 Summary • The Four Forces of Cash Flow drive the priorities for your available cash • Constantly re-forecast

  11. Common Cash Flow Mistakes • Mishandling Deposits • Trying to “Bully” the Big Guys • Focusing on CF to the detriment of profit • Not tracking leading indicators

  12. Case Study: Springfield ReManufacturing Corporation • A good example of a good example • Employee-owned • Culture of ownership: everyone knows and understands the company’s financials

  13. Case Study: Groupon • A good example of a bad example • High-risk cash flow management • Lacks culture and cash

  14. Session Wrap-Up • Profitability and cash are in two different time cycles • Leaving cash in the business is a choice • Bow to the Four Forces of Cash Flow

More Related