Daily Archives: 30 Μαΐου, 2022

Cashflow is the ultimate measure of how a business is doing – and that makes cashflow a vital indicator for investors when analysing whether a company is making money, or losing money.

Before potential investors will consider putting funds into your business, they’ll want to know that the company is in good financial health. In other words, they’ll want to see good revenues, solid accounts and a positive cashflow position – giving investors real security that they’ll see a healthy return on investment (ROI) from any funds they invest.

So with cashflow giving the clearest overview of business performance, it’s vital to provide banks, lenders and private investors the most detailed view possible of your cash.

What your cashflow statement shows investors

When approaching private investors, funding organisations or finance providers, it’s important that your business can provide the right level of financial reporting.

Your cashflow statement (or statement of cash flows) is key report for investors to review and analyse. By running a statement for a given period (whether that’s the past month, quarter or year) you can get a clear breakdown of the key areas of cash movement in the business.

• Operating cashflow – this section of your cashflow statement shows the cash inflows and outflows that relate to the everyday running of the business. This is where investors can see what money you’re generating as income, and how much you’re spending on operating overheads, expenses and other related costs.

• Investment cashflow – this is where investors will see cashflow from investments. This includes investments that are generating revenues from non-current assets (assets that won’t be turned to cash within the current accounting year), or securities that can’t be classed at cash equivalents. (περισσότερα…)