What is cash flow?
The cash flow refers to the net outflows and inflows of money that an organization or plan has in a defined period.
Cash flows provide data on the function of the organization to pay its debts. For this reason, it is essential information to know the state of the company. It is a good tool to measure the degree of liquidity of an organization.
How important is cash flow management and how does it affect your business?
Cash flow management makes it possible to order and maintain control of the profits and costs of a business, to ensure liquidity, and the consequent viability of the activity and projects of a business.
Now, you should know that there are different models of cash flow.
All of them reflect different information in relation to the viability of the activity:
- Cash flow from operations, which is related to profits and costs as part of the common activity of the organization.
- Investment cash flow, which is related to the investments carried out, and from which it is expected to achieve a future benefit.
- Financial cash flow, referring to operations such as contracting and payment of loans, purchase, marketing of activities, and other operations in relation to the company’s money.
Due to the above, not knowing the income and expenses of your company directly related to time, can lead you to blindly operate your business.
We invite you to review this important tool to determine the financial solutions that really adapt to the needs of your company or project.
Efinti, Liquidity without Borders!