In today’s “cash-is-king” world, liquidity is the oxygen you need for success. A business can be profitable and still run into trouble due to cash flow issues.
Gone are the days when you could call your friendly banker and ask him to carry you for a while. That’s why a cash flow statement and budget analysis are among the most important financial tools in your business armory.
At WDC & Associates, LLP, we forecast and evaluate your company's financial condition, estimate financing requirements, and track cash-flow sources and uses.
A cash flow statement is a record of all monies deposited and withdrawn from your business during a previous accounting period. It might all be a single page analysis or it can involve multiple schedules feeding into a summarizing document.
A budget analysis, sometimes called a cash flow analysis, draws on this information to create a financial forecast of all future deposits and withdrawals for your business. More importantly this document works to predict the timing of these transactions along with the cash availability on a daily, monthly or year’s end basis.
Often when conducting cash flow analysis, companies tend to focus on the cash flow statement. While the cash flow statement can provide a wealth of information regarding an entity's cash flow, it does not tell the entire story. There are other areas to consider when conducting a cash flow analysis, such as, inventory turnover, all receivables and payables, and even credit and financing terms can have a large impact on an entity's cash flow situation.
By analyzing the separate components, you will be able to more easily identify cash flow problems and find ways to improve your cash flow. Our team is ready and anxious to assist you with improving your cash flow.