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Importance of Cash Flow  

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Active Member

For example, if you bake cookies, you buy ingredients for 1000$. You sell cookies for 5000$. That is 4000$ profit? Well, wrong, because customers may pay later which is often happens in the business world. So you are not solvent this month. That is bad for business, especially big businesses.

Posted : 07/11/2019 3:29 pm
New Member

You need some other temporary sources of cash. For example, if you are in seasonal business you have months where you can do great but other months you would need something to go by.

Posted : 10/12/2019 3:46 pm
New Member

You can do a lot with excellent cash flow. You can expand, develop new products, buy back stock, pay dividends, or reduce debt. All very important if you need company growth.

Posted : 20/02/2020 3:45 pm
Eminent Member

I couldn't agree more. Cash flow to a business is the same as gasoline to a vehicle. Kindly excuse the reference, but you can clearly see how cash flow can benefit a business in so many ways. If your business is cash strapped, then you wont be able to restock supplies, pay workers on time or do all these other amazing things that your business needs to grow.

Posted : 28/02/2020 1:15 pm
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