A cash flow note is a financial contract used in various situations, including retail businesses and real estate deals. Borrowers promise to repay lenders, with repayment terms linked to the advance receipt of funds. Immediate cash is a benefit, but failure to repay could result in interest and penalties. A cash flow note is a […]
The direct cash flow method is the preferred way to prepare a cash flow statement, which includes operating, investment, and financial activities. Non-cash transactions may also be reported, and the statement helps businesses manage cash and report positive cash flow despite a net loss. The direct cash flow method is a style of preparation for […]
Groundwater flows through soil and rocks, with its speed depending on subsoil materials and water amount. It is used for drinking, irrigation, and ecosystems, but pollution from waste affects it. Monitoring is important for proper management, as groundwater is a finite resource. It accounts for 25% of US water use and is relied upon by […]
Electric current is the flow of electrons, powered by the electromagnetic force. Alternating current (AC) and direct current (DC) are the two main types of electron flow used to power electronic devices. Amps are the standard unit of measure for electron flow. A stream of electrons is an electric current, the same thing that powers […]
Capital flows refer to the movement of money in investing, trading, and operating a business. Companies assess capital expenditures, while governments monitor streams such as venture capital and mutual funds to understand the economy’s health. Adjustments can be made to improve productivity. Capital flows is a term used to describe the movement or flow of […]
Inventory flow is the system used by businesses to move consumable products or raw materials within the company. It begins with the purchase of raw materials or consumables from a supplier and is directly related to the company’s accounting procedures. Businesses can use a manual or automated system to reorder inventory. Inventory flow represents the […]
A cash flow model helps businesses calculate expected cash flows, with steps including selecting a time frame, using formulas to estimate inflows and outflows, and comparing with previous projects. Measurable times are crucial, and formulas vary, with discounted cash flow models providing quantitative insight. Comparing projects can help refine business modeling and diversify risk. A […]
A flow curve can refer to either a graph showing the relationship between dynamic viscosity and shear rate of a fluid in fluid mechanics, or a graph showing the relationship between pump volume flow and pump head. The dynamic viscosity measures a fluid’s resistance to flow, while shear is the pressure experienced by a fluid […]
Cash flow diagrams show the amount of money going in and out of a project, with even parts representing time periods. Arrows indicate inflow or outflow, and the diagram shows recovered money and payment schedules. It is used alongside other charts to track overall balance and profit. Accountants, project managers, and engineers looking to show […]
Net cash flow from operating activities is the amount of income generated from business operations after deducting operating expenses, which is important for determining a company’s liquidity. It reflects the amount of cash a company has on hand to pay invoices and distinguishes between a healthy financial position on paper and in practice. It is […]
Cash flow management involves estimating available cash, predicting surpluses or shortages, and identifying causes. Tips include knowing indicators, evaluating credit policies, invoicing on time, and renegotiating contracts. Cash flow management is the ability of a business to estimate the amount of cash available, the amount of money going into the business, and the amount of […]
Excess cash flow is unencumbered money earned by a business after meeting financial obligations, which can be used for any purpose. It serves as a yardstick for loan repayment and can benefit finance companies linked to the business. Excess cash flow is a term used in reference to the extra or excess cash a business […]
A business process flow diagram shows the workflow of a specific business operation within a company, created using flowcharts and automation tools. It should document the entire process from start to finish and be designed for use by other departments. It should be created by subject matter experts who understand the business. A business process […]
A pro forma cash flow predicts a business’s future cash flow, helping management identify potential cash flow shortages and operational problems. It lists sources of income and expenses, including fixed and variable costs, and is based on existing evidence. The accuracy depends on the time scale involved. A pro forma cash flow is a statement […]
Cash flow statements analyze revenue inflow from various sources, including investments and financing activities. The structure is essential for accurate cash flow analysis and consistency between periods. Preparing a cash flow statement allows for quick identification of changes in revenue-generating processes, and it is now easier than ever with accounting software. Cash flow statements are […]
A product flow diagram outlines the sequence of events in manufacturing a product, identifying each stage in a logical sequence to ensure productivity. It can be used in different settings and helps eliminate waste and keep labor costs reasonable. Adjustments can be made to compensate for changes in products. A product flow diagram is an […]
Cash flow problems can arise from unpaid receivables, excess inventory, unexpected expenses, and overpayments to employees. Companies can manage receivables by offering discounts or requiring down payments. Unsold inventory is lost capital, and unforeseen expenses can strain cash reserves. Overpaying employees can lead to high expenses and fewer products to sell. Cash flow problems can […]
A cash flow budget estimates a business’s expected income and expenses for a year, helping it to plan for borrowing and loan repayment. Cash inflow is the money made, while cash outflow is the money spent. Cash flow shows the actual amount of money going in and out of the business, while the cash flow […]
The idiom “go with the flow” means being relaxed and adaptable to change. It originated in the early 1900s as a metaphor for sea waters. Modern English speakers use shorter phrases like “chill” or “relax” to express the same meaning. The association with water metaphors has become less common among younger speakers. The English idiom, […]
Breakeven cash flow is when a company’s cash inflow matches its cash outflow. It is essential for business success and can be planned through cash flow forecasts. Profitability does not guarantee breakeven cash flow, and it is different from budgeting. Breakeven cash flow is the point in a company’s operations when its cash inflow matches […]
