When sales rise, inventory is depleted and must be replaced. Since receivables have not yet been collected, a substantial increase in sales can quickly deplete a firm's cash reserves. By utilizing one of the many computer accounting software packages available, you can maintain this critical data in a form useful for quick management decisions. A user-friendly financial management software package and computer will enable you to review projected inflows and outflows of cash from month to month or year to year. By analyzing these projections you can see the fluctuations in cash flow and create management policies to avoid potential shortfalls.
Cash flow is the lifeblood of a business.
Like a doctor, monitor the health of your company and make adjustments when problems are identified. Profit before tax Interest Expense Other Expense Other Income Est. Only if company is sole proprietorship or partnership.