Description
One of the greatest sources of stress for small business owners is managing cash flow, also known as liquidity management. 69% of business owners have been kept up at night by concerns about cash flow. More than half of U. S. businesses have lost $10,000 or more by foregoing a project or sales specifically due to issues created by insufficient cash flow I'll explain the three tanks of cash for a small business, which is how cash flows into and out of a companyNext, you'll see how historical cash flow statements and metrics provide crucial information about the health of your company's cash flow. You'll first learn about the cash conversion cycle, which is how businesses create operational cash. Many businesses poorly manage this cycle. Cash balances can greatly improve when this cycle is well managed. I'll give you a tool to calculate your cycle. Even better, estimate how much your cash and profits might go up if you reduce your cycle time. Past cash flow analysis is used to improve future cash flow. I explain the benefits of a cash flow projection and how to create one. You also get these resources: A guide to cash flow metrics that gives examples of how to calculate key indicators of your company's cash flowThe cash conversion cycle calculator to estimate how long it takes to create cash from operationsA short guide on common ways for projecting numbersLinks to a cash flow projection template and income statement template.
