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Cash Flow Management for Businesses
By a Speaker and Trainer endorsed by Microsoft, MIT
Enterprise Forum and CGMA on Strategic Finance
A straightforward and practical guide to value centric cash
flow management
2© Rizwan Khan, 2015
Cash Management for Businesses
A guide to maximizing your business value through managing
your cash flows in the best way.
 Increasing the value of your business by hundreds of thousands of
dollars.
 Avoid common cash flow mistakes that destroy businesses.
 All in 70 slides with straight forward and instantly applicable insights.
 No need for reading a lengthy book or attending a long workshop.
 Handbook for developing and refreshing your skills of cash
management.
3© Rizwan Khan, 2015
Cash Management for Businesses
Rizwan Khan
Section 1: Why is Cash King?
Section Number & Name Aims
1. Why is Cash King? 1. Introduction to the course and aims
2. Overview of importance of cash to businesses
3. Difference between profitability and cash
2. Overview of Financial
Statements
1. What is the income statement and what does it show?
2. What is the balance sheet and what does it show?
3. What is the cash flow statement and what does it show?
3. Financial Management 1. What is working capital and operational cycle?
2. What is cash spent on?
3. How to utilize financial management?
4. Cash Management for Growth 1. Is the expenditure leading to achievement of goals?
2. Is the overspending teaching us to spend less?
3. Is utilization of cash based on output?
4. Hidden Cash 1. Finding the hidden cash resource
2. A case study overview
6. Case Studies and Discussions 1. Several experiences and advice related to cash
management issues.
5
What Makes Cash King?
• Cash lets a business grow
• Cash lets a business develop products
• Cash lets a business develop capacity
• Without cash a business dies
• Greatest risk for a business is liquidity risk i.e. running
out of cash
6
What is Cash the King of ?
• Cash is the king of “achieving business goals”
• Without cash a business cant have resources to achieve your set
objectives
• A good plan without cash to back it up is not a very good plan
• Cash is the resource that enables the securing of other resources
• Cash is the king of the business world as this is the resource is
needed by every business
7
Cash Vs Profitability
• Being profitable is generating more revenue than costs
• Cash is the actual amount of cash coming in and out of
business
• You can be profitable and have “no cash”
• But you don’t want to have “no cash”
• Cash Management allows you to be smart with the cash you
have
• Purpose of “business” is to generate cash
• To generate cash the product should be inline with what
market wants
• A great product with no customers will not generate cash
• Keep the customers close in developing products and
avoid running out of cash!
Aim to generate cash
9National Entrepreneurship Network© John Mullins, 2012
Where does Cash come from?
• Capital Investments into business
• Sales that are paid for !
• Sale of equipment
• Borrowing money but this has an attached
cash outflow too
10© John Mullins, 2012
Where does cash go?
• Business Expenses
• Buying equipment
• Buying resources
• Operational costs
11
Time relevance of Cash Flows
• A business needs to make payments at certain
times
• These payments should be planned for
• A business should have enough cash to make
those payments
• This enables a business to run its operations as
planned without setbacks
• Time is measured in days
• Cash & Profitability are not the same.
• Without cash management it will be very difficult managing my
goals.
• Timing is crucial factor of cash management.
• Cash is oxygen for business. Cant live without it.
• My product is of no use if the customers wont give me cash for it.
• My marketing efforts are of no use if I wont generate cash.
Summary
13© Rizwan Khan, 2015
Cash Management for Businesses
Rizwan Khan
Section 2: Overview of Financial
Statements
The Three Statements
• Statement of Income or Profit/Loss Statement
• Statement of Financial Position
• Cash flow statement
Terms to Know
• Assets- Valuables that a business owns
• Liabilities- Promise to pay an obligation
• Revenue- Money generated from sales
• Costs/Expense- Money spent on activities
• Expenditure- Expense is a Form of Expenditure but expenditure is
generally associated with spending money on assets.
16
Income Statement
• How much money we have or will have made and spent
over a period of time?
• Shows Financial Performance
• Shows the revenue
• Shows the costs associated with selling, operations and
tax/dividends
Revenue
Cost of Sales
Gross Profit
Operating Costs
Operating Profit
Other Costs
Interest expense
Net Profit before tax
Tax
Profit After Tax
xxx
(xxx)
xxx/(xxx)
(xxx)
xxx/(xxx)
(xxx)
(xxx)
xxx/(xxx)
(xxx)
xxx/(xxx)
Format
Example
Source: velocity.uwaterloo.ca
19National Entrepreneurship Network© John Mullins, 2012
Statement of Financial Position
• How many valuable things we own and how many
things do we owe plus what is our equity
(shareholdings+ money made & held till date) at a
chosen point in time?
• Assets= Liabilities+Equity
• Shows Financial Health
Total Fixed Assets xxx
Total Current Assets xxx
Total Assets xxx*
Equity (Shares/Earnings)
Current Liabilities xxx
Non-Current Liabilities xxx
Total Liabilities xxx
Total Equity+Liabilities xxx*
*The two totals should balance at the end
Format
Example: Statement of Financial
Position
22National Entrepreneurship Network© John Mullins, 2012
Cash Flow Statement
• How much cash has entered in and exited from the
business?
• What is the net cash flow over a period of time?
• What is the cash flow from operations, investing
and financing activities ?
Net Profit xxx
Cash Adjustments xxx/(xxx)
Operating Cash Flow xxx/(xxx)
Cash Flow form Investing Activities
Capital Purchase (xxx)
Sale of Equipment xxx
xxx/(xxx)
Cash Flow from Financing Activities
Issue of equity xxx
Dividends Paid (xxx)
xxx/(xxx)
Net cash flow xxx/(xxx)
Format
Example: Cash Flow Statement
Source: velocity.uwaterloo.ca
• Income statement shows financial performance displaying revenue, costs
and profits
• Statement of Financial Position shows financial health displaying assets,
liabilities.
• Cash Flow statement shows the cash inflows and out flows of a business.
Summary
Get the complete information set for 25 USD at
http://bistructures.com/products/
To get more free information on maximizing the performance of
your business and to find out about our new products subscribe
to us at www.BIstructures.com
Follow me on:
LinkedIn: https://pk.linkedin.com/in/rizwan-khan-76b17556
Twitter: RizwanBistructures
Facebook: RizwanMkay
For questions and inquiries:
info@bistructures.com

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Cash flow management for businesses

  • 1. Cash Flow Management for Businesses By a Speaker and Trainer endorsed by Microsoft, MIT Enterprise Forum and CGMA on Strategic Finance A straightforward and practical guide to value centric cash flow management
  • 2. 2© Rizwan Khan, 2015 Cash Management for Businesses A guide to maximizing your business value through managing your cash flows in the best way.  Increasing the value of your business by hundreds of thousands of dollars.  Avoid common cash flow mistakes that destroy businesses.  All in 70 slides with straight forward and instantly applicable insights.  No need for reading a lengthy book or attending a long workshop.  Handbook for developing and refreshing your skills of cash management.
  • 3. 3© Rizwan Khan, 2015 Cash Management for Businesses Rizwan Khan Section 1: Why is Cash King?
  • 4. Section Number & Name Aims 1. Why is Cash King? 1. Introduction to the course and aims 2. Overview of importance of cash to businesses 3. Difference between profitability and cash 2. Overview of Financial Statements 1. What is the income statement and what does it show? 2. What is the balance sheet and what does it show? 3. What is the cash flow statement and what does it show? 3. Financial Management 1. What is working capital and operational cycle? 2. What is cash spent on? 3. How to utilize financial management? 4. Cash Management for Growth 1. Is the expenditure leading to achievement of goals? 2. Is the overspending teaching us to spend less? 3. Is utilization of cash based on output? 4. Hidden Cash 1. Finding the hidden cash resource 2. A case study overview 6. Case Studies and Discussions 1. Several experiences and advice related to cash management issues.
  • 5. 5 What Makes Cash King? • Cash lets a business grow • Cash lets a business develop products • Cash lets a business develop capacity • Without cash a business dies • Greatest risk for a business is liquidity risk i.e. running out of cash
  • 6. 6 What is Cash the King of ? • Cash is the king of “achieving business goals” • Without cash a business cant have resources to achieve your set objectives • A good plan without cash to back it up is not a very good plan • Cash is the resource that enables the securing of other resources • Cash is the king of the business world as this is the resource is needed by every business
  • 7. 7 Cash Vs Profitability • Being profitable is generating more revenue than costs • Cash is the actual amount of cash coming in and out of business • You can be profitable and have “no cash” • But you don’t want to have “no cash” • Cash Management allows you to be smart with the cash you have
  • 8. • Purpose of “business” is to generate cash • To generate cash the product should be inline with what market wants • A great product with no customers will not generate cash • Keep the customers close in developing products and avoid running out of cash! Aim to generate cash
  • 9. 9National Entrepreneurship Network© John Mullins, 2012 Where does Cash come from? • Capital Investments into business • Sales that are paid for ! • Sale of equipment • Borrowing money but this has an attached cash outflow too
  • 10. 10© John Mullins, 2012 Where does cash go? • Business Expenses • Buying equipment • Buying resources • Operational costs
  • 11. 11 Time relevance of Cash Flows • A business needs to make payments at certain times • These payments should be planned for • A business should have enough cash to make those payments • This enables a business to run its operations as planned without setbacks • Time is measured in days
  • 12. • Cash & Profitability are not the same. • Without cash management it will be very difficult managing my goals. • Timing is crucial factor of cash management. • Cash is oxygen for business. Cant live without it. • My product is of no use if the customers wont give me cash for it. • My marketing efforts are of no use if I wont generate cash. Summary
  • 13. 13© Rizwan Khan, 2015 Cash Management for Businesses Rizwan Khan Section 2: Overview of Financial Statements
  • 14. The Three Statements • Statement of Income or Profit/Loss Statement • Statement of Financial Position • Cash flow statement
  • 15. Terms to Know • Assets- Valuables that a business owns • Liabilities- Promise to pay an obligation • Revenue- Money generated from sales • Costs/Expense- Money spent on activities • Expenditure- Expense is a Form of Expenditure but expenditure is generally associated with spending money on assets.
  • 16. 16 Income Statement • How much money we have or will have made and spent over a period of time? • Shows Financial Performance • Shows the revenue • Shows the costs associated with selling, operations and tax/dividends
  • 17. Revenue Cost of Sales Gross Profit Operating Costs Operating Profit Other Costs Interest expense Net Profit before tax Tax Profit After Tax xxx (xxx) xxx/(xxx) (xxx) xxx/(xxx) (xxx) (xxx) xxx/(xxx) (xxx) xxx/(xxx) Format
  • 19. 19National Entrepreneurship Network© John Mullins, 2012 Statement of Financial Position • How many valuable things we own and how many things do we owe plus what is our equity (shareholdings+ money made & held till date) at a chosen point in time? • Assets= Liabilities+Equity • Shows Financial Health
  • 20. Total Fixed Assets xxx Total Current Assets xxx Total Assets xxx* Equity (Shares/Earnings) Current Liabilities xxx Non-Current Liabilities xxx Total Liabilities xxx Total Equity+Liabilities xxx* *The two totals should balance at the end Format
  • 21. Example: Statement of Financial Position
  • 22. 22National Entrepreneurship Network© John Mullins, 2012 Cash Flow Statement • How much cash has entered in and exited from the business? • What is the net cash flow over a period of time? • What is the cash flow from operations, investing and financing activities ?
  • 23. Net Profit xxx Cash Adjustments xxx/(xxx) Operating Cash Flow xxx/(xxx) Cash Flow form Investing Activities Capital Purchase (xxx) Sale of Equipment xxx xxx/(xxx) Cash Flow from Financing Activities Issue of equity xxx Dividends Paid (xxx) xxx/(xxx) Net cash flow xxx/(xxx) Format
  • 24. Example: Cash Flow Statement Source: velocity.uwaterloo.ca
  • 25. • Income statement shows financial performance displaying revenue, costs and profits • Statement of Financial Position shows financial health displaying assets, liabilities. • Cash Flow statement shows the cash inflows and out flows of a business. Summary
  • 26. Get the complete information set for 25 USD at http://bistructures.com/products/ To get more free information on maximizing the performance of your business and to find out about our new products subscribe to us at www.BIstructures.com Follow me on: LinkedIn: https://pk.linkedin.com/in/rizwan-khan-76b17556 Twitter: RizwanBistructures Facebook: RizwanMkay For questions and inquiries: info@bistructures.com