FINANCE:

Money (Cash) Is More Valuable Than Any Other Form Of Investment Tool

• Finance is the study of how people allocate their assets • A key point in finance, which affects decisions, is the

time value of money• a unit of currency today is worth more than the same unit

of currency tomorrow.

The "cash is king" phrase refers to the ability of a business to have enough cash on hand to cover short-term operations, buy assets such as equipment and machinery, or acquire other facilities.

More businesses fail for lack of cash flow than for lack of profit.

If CASH IS KING then cash flow is the blood that keeps the heart of the kingdom pumping.

Cash is the paramount for running a business. And Cash flow is one of the most critical components of success for a small or mid-sized business.

Firms that don't exercise good cash management may not be able to make the investments needed to compete, or they may have to pay more to borrow money to function.

Getting Control Over Your Cash Flow

What is my cash balance right now?What do I expect my cash balance to be six months

from now?

OR

Track your cash flow results every month to determine if your management is creating the type of cash flow your

business needs.

CASH MANAGEMENT

“ Involves the collection, handling, and managing usage of cash”

Why IS IT IMPORTANT ?

• Sufficient cash during peak time

• Planning capital expenditure projects

• Invest surplus cash

• Advantage of discount

CONSEQUENCES IF YOU FAIL TO MANAGE CASH IN THE RIGHT WAY

• Not able to invest

• Loans with

undesirable interest

TIPS FOR EFFECTIVE CASH FLOW MANAGEMENT

• Review Receivables• Offer Prompt Discounts• Push Payables• Pay your suppliers on

time

SHORT TERM……

What Is The Issue ?

What You Can Do ?

What to avoid ?

Understanding and managing cash flow is of chief importance

Customers are likely to pay their bills more slowly

Sales and profitability will likely diminish

Banks are less inclined to lend against insufficient or aging collateral

Liquidity can become constrained very rapidly.

Undertake a critical analysis of your business operations

Understand the resulting impact on liquidity

Build and conserve cash

Forecast near-term cash receipts and cash disbursements based

Reduce inventory levels

Replenish on a just-in-time basis, to the extent practical

Sell aged inventory

Growth consumes cash

A significant sales or expansion opportunity that appears profitable may lead in dire consequences

An increase in the duration of the cash conversion cycle is a negative signal

Consider the implications to cash flow from increased sales requiring capital expenditures and ramp-up periods

Understand the worst-case scenario

"Growing your business puts a huge strain on cash," "You almost always have to make investments and bring certain expenses on ahead of achieving the

higher revenue and cash flow that comes with successful growth.

Insufficient cash is one of the main reasons for small business failure

You really need to structure your business to have a positive cash flow if you want your business to grow

and increase profits.

THANK

YOU !!