Cash Flow Drivers

Cash flow refers to the net balance of cash and cash equivalents moving into and out of a business at a specific point in time.

Some examples of cash flow drivers are:

• • Days Sales Outstanding

  • Days Inventory Outstanding

  • Days Payable Outstanding

  • Sale or Purchase of Assets

  • Incurring or Paying Down Debt

  • Owner Investments or Draws

Analysis of cash flow drivers can also produce great results when leveraged correctly.

Cash flow is portrayed by analyzing the balance sheet instead of the income statement, so it's a bit of a different animal than revenue or profit. That being said, cash flow is just as important, even though it may be slightly more difficult to fully understand.

Cash flow is also a key determinant in maintaining healthy liquidity and solvency ratios.

The CFO Service will translate the factors detracting from your healthy cash flow and help you turn them around in order to keep more money in your bank account.