Cash flow

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A revision presentation for clients of Aqhuman Financial Training

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Cash flow

  1. 1. www.aqhuman.com Cash flow statement Let us start with a simple cash flow format; Cash in: Customers New loans Share issues Disposal of assets Divestment Investment income Aqhuman financial training & coaching Cash out: Suppliers Loan repayments Share buybacks Capex Acquisition Interest/tax/ dividends
  2. 2. www.aqhuman.com Cash flow statement Cash in X Cash out ( X) Net cash flow X Opening balance X Closing balance X Aqhuman financial training & coaching The cash flow simply shows the cash in and out , the starting position and thus the closing position
  3. 3. www.aqhuman.com Cash flow statement Cash from operations (customers – suppliers) Cash from financing (new shares-buybacks+new loans-repayments-interest) Cash from investing activities (Disposal of asset+divestments-capex-acquisitions- dividends) Tax paid Aqhuman financial training & coaching The cash flow is normally shown with similar items grouped together
  4. 4. www.aqhuman.com Cash flow statement The cash flow is popular as: -There are no funny accounting rules; did the cash come in/out or not? -Company survival is a cash matter -Growth only comes from generating cash (in order to hire more staff, buy other companies, buy/lease more buildings ...) Aqhuman financial training & coaching
  5. 5. www.aqhuman.com Why profit cash flow •The income statement is an activity based statement; sales go in when they are earned, costs when they are used. Neither is shown when they are collected or paid for (ie credit given or taken) •The income statement ignores certain investment activity (buying new equipment, selling a business) •The income statement ignores certain financing activity (share issues, loan repayments) •Depreciation is a cost for p&l purposes but does not represent a cash flow Aqhuman financial training & coaching
  6. 6. www.aqhuman.com Aqhuman Financial Training Aqhuman’s principal is Kevin Amor, FCA. Kevin qualified as a chartered accountant with PWC. He spent 12 years working in commerce at financial controller/director level. Kevin now has more than 12 years experience in financial training. He trains managers at all levels and gives 1 to 1 financial coaching to senior executives. He also teaches corporate finance and accounting for a number of business schools’ MBA programmes. Aqhuman financial training & coaching

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