Please enable JavaScript.
Coggle requires JavaScript to display documents.
Cash Flow - Coggle Diagram
Cash Flow
Cash Inflow
This is when cash flows intot he business
Comes from:
Sale of assets/product
Investment
Bank loans
Pretty much anything where the business would get money
How to increase it
Sell more products/make more money
Secure ore investment
Use lean production techniques such as Just in Time to ensure that profit is maxmised
Cash outflow
This is the cash that is leaving the business
How to decrease it
Use lean production techniques like JIT to decrease costs
Switch to cheaper suppliers
Reduce waste
Leaves From:
Buy raw materials
Buying assets
Hiring outsider agencies to do construction work so you can expand
Pretty much anything that would involve paying for something
Net Cash flow
This is the overall cash movement in the business within a certain timeframe.
Calcuted by:
Cash Inflows - Cash outflows
Ideally this should be positive as then you would be making money
Improved by:
Increasing cash inflows
Raising the price
Make and sell more products
Chase up on debts owed by other people to you
Decreasing Cash Outflows
Trade Credit
Using cheaper raw materials
Relocating to a cheaper area.
There is a possibility of having too much cash inflows as it could be made to seem like a bunch of cash is just sort of lying there and not doing anything