Under current conditions in financial management due to limited financial resources is essential for almost any company.Ultimately, the matter with which the efficiency of the organization supervises and directs the cash flow depends on its competitiveness and business success.The analysis of this indicator plays an important role in assessing the financial position of the company.
concept and essence of the cash flow
general economic term itself is derived from the English phrase «cash flow», which can be translated as "cash flow."Cash flows are movements of finance companies for a certain period of time.In other words, it is the difference between receipts and payments for a specific period.With the help of this indicator can reveal how the money is a movement that is not always taken into account when determining the gain: taxes, investment costs, mortgage payments, taxes on the profits, etc.For a more complete disclosure of the essence of this term, we consider the classification of its components.
Types of cash flows
1. Depending on the size of service business processes:
- across the enterprise.This is the most general form, including all inflows and outflows of finance in the organization.
- By structural units.The role of the latter may also act as centers of responsibility.
- On specific business transactions.It is a primary object of controlling financial resources.
2. Depending on the type of business activity cash flows are:
- from operating activities.Related to payment to suppliers and outsourced services related to production activities.This includes the salaries of the personnel involved in the operation process, and the corresponding tax payments.At the same time this type of cash flow shows the proceeds from the sale of goods and the tax authorities in the case of allocation of overpaid mandatory payments;
- investing activities.It includes receipts and payments from the financial and real investment, as well as income from the sale of intangible assets and the disposal of fixed assets, investment portfolio tool rotation and the results of other similar transactions;
- financing activities.This type is associated with the movement of money, related to raising loans, credits, additional of the share capital, payment of dividends and interest due on deposits, etc.
3. In the direction or outcome:
- positive.This collection of all the proceeds of each type of activity.As an analogue also use the expression "the inflow of financial resources";
- negative.The total amount of all payments in the course of the enterprise.In other words, this "outflow of resources."
4. By the method of calculating the amount of cash flow is:
- clean.Is the difference between all income and expenditure;
- gross.It characterizes all positive and negative flows for a particular reporting period.
5. In terms of adequacy:
- excess.Proceeds exceeds the needs of the company;
- scarce.The influx of money below the real needs of the enterprise.
6. As a method of estimating the time the cash flows are:
- present, given the magnitude of the current moment;
- future, given the cost to a certain coming period.
7. By continuously forming:
- regular (usually it is related to operating activities);
- discrete (the result of one-time business transactions such as the purchase of a license, grant assistance, the purchase of a property complex, etc.).
8. Stability interval of time during which they are formed, regular cash flows are:
- regular at regular intervals of time within the period under review.An example is the annuity.
- regular with irregular time intervals within the same period (eg, leasing payments with special payment schedule).
The above classification gives the opportunity to more fully and purposefully carry out planning, accounting and analysis of cash flows of the enterprise, regardless of the scope of its activities.
