© Mark T. Schenkel Cash Flow Management Dr. Mark T. Schenkel ETP 3700.

Slides:

Advertisements

Similar presentations

Sina Enayati. Introduction: There is no doubt that we live in very challenging economic times. The housing slump, severe unemployment, natural disasters,

Advertisements

Let’s Understand How Cash Flow Works!

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 0 Chapter 16 Short-Term Financial Planning.

Valuing an Acquisition

Financial Management F OR A S MALL B USINESS. FINANCIAL MANAGEMENT 2 Welcome 1. Agenda 2. Ground Rules 3. Introductions.

© 2012 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 1 [Name] [Title]

Chapter 11 – Forecasting and Short-Term Financial Planning  Learning Objectives  Understand how sales forecasts are used to predict cash inflow  Understand.

Some Tactical Mistakes to look out for:. In Review: In all cases, when a Company makes a tactical blunder, at least two functional managers are responsible.

Managing Cash Flow. Cash Management The process of forecasting, collecting, disbursing, investing, and planning for the cash a company needs to operate.

ÅA BUSINESS PLAN DEVELOPMENT - Financial Plans. ÅA What to Include in a Financial Analysis and Plan When does the business have to buy resources, such.

Short-Term Financial Planning Final chapter!

Early Childhood Program Management Finance and Budgeting By J.C. Watkins.

Adapted from Smith and Kihlstrom (1999) Integration of Financial Statements: From Smith and Kihlstrom (1999 ) Assumptions Ending Balance Sheet Cash Flow.

Valuing an Acquisition

Key Concepts and Skills

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Short-Term Financial Planning Chapter 16.

Key Concepts and Skills

The Financial Plan Part 1: Projecting Financial Requirements

BA 346 Working as an Entrepreneur Week 4-5. Accounting  “Language of Business”  Measurement What were our goals? How did we do?  Profit: The Bottom.

Welcome to Financial Series #3 The Cash Flow Forecast.

Forecasting of cash flows. On completing this chapter, you will be able to:  Understand the importance of cash to business.  Explain the difference.

Topic 3 Accounts & Finance

Financial Statement Analysis

Financial Statements, Cash Flow, and Taxes  Key Financial Statements  Balance Sheet  Income Statement  Statement of Stockholders’ Equity  Statement.

FINANCIAL PLANNING: SHORT TERM AND LONG TERM 1 ENTREPRENEURIAL FINANCE.

SHORT-TERM FINANCIAL PLANNING. Scope of Short-Term Planning Focus on current assets and liabilities- items that within a year translate into cash Net.

© 2003 The McGraw-Hill Companies, Inc. All rights reserved. Short-Term Finance and Planning Chapter Eighteen Prepared by Anne Inglis, Ryerson University.

McGraw-Hill/Irwin ©2001 The McGraw-Hill Companies All Rights Reserved 16.0 Chapter 16 Short-Term Financial Planning.

Short-Term Finance and Planning

How does Cash flow through Working Capital? Cash flows in a cycle into, around and out of a business. It is the business's life blood and every manager's.

Let’s Understand How Cash Flow Works!

IBM Chris Driscoll ACG Executive Summary IBM is an IT company that has been around for a long time and will continue to be since they are since.

EDEXCEL BUSINESS for GCSE © 2009 Ian Marcousé and Naomi Birchall Section 3 Putting a business idea into practice.

Financial Statements Business Management.

Mark T. Schenkel, Ph.D. Assistant Professor in Entrepreneurship FINANCING AND SOURCES OF FUNDING FOR NEW VENTURES.

FINANCIAL STATEMENTS. Why Use Financial Statements? Investors and bankers Investors and bankers Suppliers and creditors Suppliers and creditors You and.

Short-term finance Decisions that involve cash inflows and outflows that occur within a year (i.e., decisions that involve current assets and current liabilities)

The Statement of Cash Flows Cash, liquidity, and the cash flow cycle The cash flow statement preparing a cash flow statement –It’s as easy as 1,2,3.

CHAPTER 3 Working With Financial Statements. Key Concepts and Skills Know how to standardize financial statements for comparison purposes Know how to.

Budgeting and Standard Cost Systems Chapter 13. Budgeting A budget is a financial and quantitative plan for the acquisition and use of resources Use for.

10-2 The Financial Plan McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 10.

Measuring Financial Performance 1 ENTREPRENEURIAL FINANCE.

Financing A Venture. Every Venture Needs Money!  No matter it is a not-for-profit cooperative or a profit –making corporation, a new start-up or a well-established.

Accounting for Executives Week 6 15/4/2010 (Fri) Lecture 6.

10-2 The Financial Plan McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 10.

Outline: Chapter 7 Monitoring Financial Performance Tracking assumptions Establishing milestones Getting the numbers needed to manage Using numbers to.

Managing Cash Flow Chapter 12. Cash Management the process of forecasting, collecting, disbursing, investing, and planning for the cash a company needs.

Chapter McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 19 Short-Term Finance and Planning.

How can I make a profit and still run out of cash? Review Financial Statements Cash Flow and Working Capital.

FINANCIAL MANAGEMENT FINANCE & BANKING: CHAPTER 3 FINANCIAL MANAGEMENT.

Entrepreneurship Business Plan Utilizing Financial Documents.

Understanding Business Cash Flow. About the SBDC Eighteen Centers in Pennsylvania More than 1,000 Centers Nationwide The SBDC network.

Cash Flow Cash flow through your business as a result of three activities: – Operations – Investments – Finances We will only deal with cash flow relating.

Entrepreneurship Delivered in: Islamia University Bahawalpur Presented By: Tasawar Javed.

3-1 CHAPTER 3 Financial Statements, Cash Flow, and Taxes Key Financial Statements Balance sheet Income statements Statement of retained earnings Statement.

Seminar 10 Course Overview. Cost Terminology Variable Costs -Change in proportion to changes in volume or activity Fixed Costs -Do not change in response.

Entrepreneurship You’re the Boss!. Entrepreneur An individual who undertakes the creation, organization, and ownership of a business. He or she accepts.

Financial Management Decisions n Investment: What assets to own? n Financing: How to pay for those assets? n Dividend: What to do with Net Income?

Management of Working Capital. Balance Sheet A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific.

Working capital is the money a business needs to pay its short term expenses. These include: Expenditure such as staff training Raw materials or stocks.

CHAPTER 18 SHORT-TERM FINANCE AND PLANNING Copyright © 2016 by McGraw-Hill Global Education LLC. All rights reserved.

Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen.

Ratio Analysis…. Types of ratios…  Performance Ratios: Return on capital employed. (Income Statement and Balance Sheet) Gross profit margin (Income Statement)

Hisrich Peters Shepherd Chapter 10 The Financial Plan Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin.

WORKING CAPITAL MANAGMENT. 2 Working Capital Working Capital – All the items in the short term part of the balance sheet, e.g. cash, short term debt,

Chapter 3 Learning Objectives

What are the major financial statements needed in a business plan?

Chapter 3 Learning Objectives

Cash is KING!!! How do companies boost cash?

Knowledge Organiser Effective Financial Management

Presentation transcript:

© Mark T. Schenkel Cash Flow Management Dr. Mark T. Schenkel ETP 3700

© Mark T. Schenkel2 Cash Flow “Cash is King” Life blood of business Cash flow related financial reports are most important (even more important than Income Statement) Understand cash versus accrual

© Mark T. Schenkel3 Figure 9-1 Example of Cash Flow Cycle Over the Life Cycle of a Business Profits Cash flow Start-up to Early StageGrowth StageMaturity 0

© Mark T. Schenkel4 Reasons for Cash Flow Problems Difficulty in collecting receivables (example) Seasonality of sales (example) Unexpected variation in sales Policies on how payments are made to suppliers (example) Large expenditures up front for customer projects Capital projects Ineffective inventory management

© Mark T. Schenkel5 Measuring Cash Flow Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities

© Mark T. Schenkel6 Bleed Rate In periods of negative cash flow, entrepreneur must measure and understand the “bleed rate” of the venture Bleed rate = monthly negative cash flow Understand source of bleed  If business has operating bleed focus on time to operating break-even  If business has operational positive cash flow, keep overhead and new fixed costs to a minimum until overall positive cash flow is achieved

© Mark T. Schenkel7 Time Out of Cash Cash on Hand + Cash Available from Financing Sources TOC = _____________________________________________ Monthly Bleed Rate Typically Measured in Months (sometimes in weeks or days) Gives time measure of cash remaining

© Mark T. Schenkel8 Extending Time Out of Cash Decrease bleed by cutting costs Decrease time to break-even by accelerating sales growth If pricing is inelastic, price increase possible Raise more money….

© Mark T. Schenkel9 Managing Cash During Inflation Keep overhead low – Did I mention that Cash is King?? Build cash reserves to buffer short term price increases that precede higher prices on your part Watch your margins carefully. Worry about growing profits, not sales

© Mark T. Schenkel10 Managing Cash During Inflation Don't lock into long-term contracts that have narrow margins with large customers When inflation heats up even a little, be aggressive with frequent small price increases rather than waiting and trying to catch up at some point with one big jump Pay down variable interest loans ASAP to avoid interest rate hikes in the future