What do you Know About Cash Flow?
You know how it is: you may be “rich” in the sense that you own a lot of things. But if you do not have cash, you cannot buy anything else – at least you cannot pay for it.
A company’s capital (assets) is either in the form of Cash (Cash & Bank) or tied up in things such as Inventory and Accounts receivable as well as in Fixed assets. If you run low on cash you may need to borrow money – which comes with a cost that you may want to avoid. This is one, among many, reasons why companies keep a sharp eye on their cash balance – the Cash Flow.