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Revenue and receivables

Revenue and receivables are your primary process when it comes to earning profits, earning resources to spend, to invest. Something to note is that revenue is just this one stream on your income statement, it’s the stream of your income for the defined period and it arises from the sale of goods or services (whatever […]

Controls over production and inventory

Why do you think it’s important to have controls over inventory? Inventory is related to your company’s operations. They are what you sell to generate revenues, they are your assets you sell regularly to earn profits. Note here that earning profits requires that your goods are priced accurately so as to cover for all kinds […]

Cash flows from financing activities

Statement of cash flows includes group cash flows that aren’t related to operations nor investments. If you think about it, your company operates, that’s it’s primary purpose. Your company also invests into assets, whether they’re physical assets, financial assets or say subsidiaries. However, your company also needs financing (that is investments to parties making those […]

Cash flows from investing activities

One of the reasons why it’s important to have positive cash flows from operations arises from the fact that for sustainability your company at some point needs to invest. The investments may be smaller and regular or substantial and take place less often, however the fact remains that to keep the business going at one […]

Cash flows from operating activities

Cash flows from your company’s operating activities are the most important ones in terms they show whether your very core of business is generating or losing cash. A sustainable business is always earning cash so it’s important to have cash flows operating activities positive. Should it be that they are negative, it’s important to understand […]

Statement of cash flows

Cash flows are in fact very important for your company. ‘Cash’ in itself is a resource usable for everything your business needs to keep on running – buying goods to sell, paying for wages, buying services and so on. It’s also a resource to be paid as dividends, i.e. owner’s income from the operations of […]