Understanding Cash Flow
The objective of this E-book is to help the reader understand the Statement of Cash Flows and what it tells them about their organization. It also includes explanations of the impact that operations have on cash flow and provides clarity to non-financial personnel
I’ve taken a lot of accounting courses and the Statement of Cash Flows was consistently the most difficult and,consequently, misunderstood subject in every class. It wasn’t until I actually had to manage my cash in the real business world that I really understood the process. This is because in school we learned the mechanics of creating one, but didn’t really understand the “why” of what we were doing. In the end, I want you to be able to say that you understand, not only the mechanics, but the reasons for doing them the way they are done. Includes Excel file with linked and diagramed Statement of Cash Flow, Balance Sheet, and Income Statement as examples.
As I was writing this I realized that it was as much for people in Operations as much as it was for students of Accounting! The people who only want to know what they need in Accounting and don’t want to spend an entire semester and a few hundred dollars to do it!
The book is presented in PDF format so that you can use the free Acrobat reader from Adobe and the example file that comes with the book is in Microsoft Excel.
If you find that this doesn’t explain what you need to know about cash flow, we will refund your money!
Upon purchase, a link will automatically be emailed to you to download this product.
Includes cash flow examples for retail, distribution, manufacturing and service organizations.
Can a business be profitable and still go out of business?
The response has to be an emphatic YES! This book gives specific examples of profitable businesses that ceased to exist because of poor cash flow management and it identifies what could be done to improve the financial health of the business.
Can a business lose money and still be financially healthy?
Yes, although this is a trickier situation and usually much tougher to maintain.
Need to know something specific?
If it’s not in the book, it entitles you to ask specific questions or for clarifications.
About the author?
John Leonard – CFO of a southern California manufacturer.
With more than twenty years experience in accounting & finance, covering a half dozen companies, John has been in manufacturing, distribution, retail, transportation and financial services industries. He has seen companies with less than one inventory turn (enough inventory to last more than a year) as well as greater than 24 turns (less than two weeks worth of inventory). He has been in situations with over 120 days in Accounts Receivable (four months worth of sales) and has been in organizations where there was Hell to pay if Accounts Receivable was less than 93% under 30 days.
John has been in organizations where a larger parent company manages all of the cash and has been in the position of looking between the seat cushions for change to make payroll. He prefers the former.
John has a Bachelor of Science degree in Business Administration with a Concentration in Accounting and graduated with honors from Biola University with a Masters of Business Administration.