Basic Cash Flow Management

On Demand Webinar

Webinar Details $219

  • Rated:
  • Webinar Length: 100 Minutes
  • Guest Speaker:   Chuck Borek
  • Topic:   Taxation and Accounting
  • Credit:   CPE 2.0, ATATX 1.5
All Access Membership

Cash, as they say, is king. Profitability alone does not ensure the survival of a business; many profitable businesses fail every year due to insufficient cash flow management. This webinar will introduce you to the basic concepts and methods involved in cash flow management and provide you with some tools for implementing a reasonable cash management program. 

Learning Objectives:

  • The difference between cash flow and profitability
  • Tax: the cost of cash flow
  • Operating capital vs. working capital 
  • Determining “free cash flow”
  • Purpose and methods of cash management
  • Mining the Cash Flow Statement for information

Level: basic
Format: Live webcast
Instructional Method: Group: Internet-based
NASBA Field of Study: Accounting 
Program Prerequisites: None
Advance Preparation: None

  1. Introduction
  2. Purpose of GAAP Accounting 00:06:16
  3. Importance of Matching in GAAP 00:07:49
  4. Importance of Matching in GAAP - Salvage Value 00:08:48
  5. Definition of Profitability 00:10:51
  6. Profitability As A Ratio Concept 00:12:38
  7. Profitability as a Return Concept 00:18:17
  8. Lack of Profitability 00:18:16
  9. Profit as a Concrete Amount 00:20:10
  10. Neither Profit Nor Profitability = Cash Flow 00:23:27
  11. Importance of Cash Flow 00:26:47
  12. Definition of Cash Flow 00:28:40
  13. Tax: The Cost of Cash Flow 00:31:53
  14. Operating Cash Flows 00:34:02
  15. Operating Cash Flows vs. Operating Capital 00:36:03
  16. Importance of Working Capital 00:38:16
  17. Investing Cash Flows 00:40:14
  18. Investment (Capital) Management 00:42:21
  19. Capital Budgeting Techniques 00:43:57
  20. Financing Cash Flows 00:47:40
  21. Financing Cash Flow Confusion 00:48:59
  22. Assessing the Need for Capital 00:50:53
  23. Cash Flow Statement 00:53:29
  24. Cash Flow Statement Introduction 00:54:26
  25. Direct Method 00:56:42
  26. Direct Method Cash Flow Statement 00:58:40
  27. Indirect Method 00:59:14
  28. Cash Flows From Operating Activities Example 00:59:28
  29. Cash Flow Statement Review - Direct And Indirect Operating Activities 00:59:57
  30. Cash Flow Statement Review -  Direct And Indirect Methods 01:00:39
  31. Direct And Indirect Methods 01:01:28
  32. UCA Cash Flow Statement 01:02:29
  33. UCA Cash Flow Statement Cont’d 01:03:30
  34. Elements of Internal Controls 01:04:43
  35. Segregation of Duties 01:09:54
  36. Authorizations and Approvals 01:10:51
  37. Security of Cash 01:12:02
  38. Review and Reconciliation 01:13:29
  39. Free Cash Flow 01:14:27
  40. Calculating Free Cash Flow 01:15:25
  41. Calculating Free Cash Flow Using Operating Cash Flows 01:15:53
  42. Calculating Free Cash Flow Using Sales Revenue 01:16:37
  43. Calculating Free Cash Flow Using Net Operating Profits 01:18:42
  44. Interpreting Free Cash Flow 01:20:18
  45. Cash Management Warning Signs 01:22:19
  46. Methods of Cash Management 01:24:32
  47. Analyzing Business Liquidity 01:26:49
  48. Concerns About the Current Ratio 01:27:46
  49. Average Current Ratios 01:30:24
  50. Benefits of Other Ratios 01:31:15
  51. Assessing Accounts Receivable 01:31:46
  52. Cash Conversion Cycle 01:32:55
  53. Cash Conversion Cycle Example 01:34:25
  54. Improving Cash Conversion Cycle 01:36:01
  55. Forecasting Cash 01:36:37
  56. Managing “Float” 01:37:16
  57. Fixed Charge Coverage Ratio 01:37:59
  58. Fixed Charge Coverage Ratio Formula 01:38:48
  59. Real Estate Cash Flow Analysis 01:39:19
  60. Real Estate Cash Flow Analysis - Considerations 01:39:38
  61. Cash Flow Statement Example 01:40:25
  62. Presenter Contact Information 01:41:29
  63. Presentation Closing 01:41:47
  • Accounts Payable (AP) 00:26:55, 01:23:35
  • Accounts Receivable (AR) 00:25:54, 01:31:36
  • Accrual Method Of Accounting 00:03:07, 00:06:42, 00:07:49, 00:21:39, 00:24:50, 00:53:44
  • Asset 00:23:44, 00:36:19, 01:04:03, 01:30:00
  • Balance Sheet 00:36:10
  • Capital Needs Assessments (CNA) 00:52:46
  • Cash Flow (CF) 00:01:03, 00:11:36, 00:23:35, 00:31:58, 00:33:16, 00:40:00, 00:54:39, 01:00:00, 01:04:39, 01:14:27, 01:20:23, 01:23:26, 01:32:16, 01:39:32
  • Cash Flow Statement 00:06:01, 00:24:01, 00:40:0, 00:53:29, 00:54:26, 01:01:25
  • C Corporation 00:32:34
  • Cost 00:09:39, 00:31:56, 01:20:48
  • Cost Of Goods Sold (COGS) 00:13:18, 01:34:30
  • Cryptocurrency 00:31:03
  • Days Sales Outstanding (DSO) 01:22:34
  • Depreciation 00:08:00, 00:09:18, 00:10:33, 00:25:58
  • Direct Method 00:56:42, 00:57:18, 01:01:11, 01:01:36
  • Dividends 00:49:41, 01:15:02, 01:39:33
  • EBITDA 00:15:26
  • Expenditures 01:14:44, 01:16:06, 01:22:15, 01:39:02
  • Expense 00:06:40, 00:08:19, 00:26:17, 01:39:45
  • Financial Statement 00:24:06, 00:54:28
  • Financial Statement 00:25:57
  • Generally Accepted Accounting Principles (GAAP) 00:06:20, 00:07:48, 00:09:44, 00:19:12, 00:24:03, 00:26:35, 00:41:30, 00:54:31
  • Income Statement 00:23:52, 00:54:33
  • Indirect Method 00:56:41, 00:57:08, 00:59:14, 01:01:59
  • Inventory 00:36:36, 01:24:19, 01:28:32, 01:31:21
  • Liability 00:21:10, 00:27:44, 00:37:04
  • Limited Liability Company (LLC) 00:32:22
  • Profit 00:11:08, 00:13:35, 00:20:09, 00:23:34, 00:36:20
  • Revenue 00:07:25, 00:08:29, 00:09:34, 00:11:27, 00:13:45, 01:15:41, 01:20:34
  • Salvage Value 00:09:50
  • S Corporation 00:32:30 
  • Subchapter C 00:32:10
  • Subchapter K 00:32:17
  • Subchapter S 00:32:18
  • Supplier 00:05:38, 00:27:48
  • Transaction 00:48:03, 01:03:24
  • Uniform Credit Analysis Cash Flow (UCA) 01:02:30

Accounts Payable (AP): The amount of money a company owes creditors (suppliers, etc.) in return for goods and/or services they have delivered.

Accounts Receivable (AR): The amount of money owed by customers or clients to a business after goods or services have been delivered and/or used.

Accrual Method Of Accounting: Accrual accounting is an accounting method where revenue or expenses are recorded when a transaction occurs versus when payment is received or made. The method follows the matching principle, which says that revenues and expenses should be recognized in the same period.

Asset: Property owned by a person or company, regarded as having value and available to meet debts, commitments or legacies.

Balance Sheet (BS): A financial report that summarizes a company's assets (what it owns), liabilities (what it owes) and owner or shareholder equity at a given time.

C Corporation: A C corporation, under United States federal income tax law, refers to any corporation that is taxed separately from its owners. A C corporation is distinguished from an S corporation, which generally is not taxed separately. Most major companies are treated as C corporations for U.S. federal income tax purposes.

Capital Needs Assessment (CNA): A Capital Needs Assessment (CNA) is a systematic assessment to determine a Property's physical capital needs over the next 20 years based upon the observed current physical conditions of a Property.

Cash Basis Cash Flow: Cash accounting reflects business transactions on a company's financial statements when the cash flows into or out of the business.

Cash Flow (CF): The revenue or expense expected to be generated through business activities (sales, manufacturing, etc.) over a period of time.

Cost: The sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article to its existing condition and location

Cost Of Goods Sold (COGS): The direct expenses related to producing the goods sold by a business. The formula for calculating this will depend on what is being produced, but as an example this may include the cost of the raw materials (parts) and the amount of employee labor used in production.

Cryptocurrency: A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a digital ledger or computerized database using strong cryptography to secure transaction record entries, to control the creation of additional digital coin records, and to verify the transfer of coin ownership.

Days Sales Outstanding (DSO): Days sales outstanding (DSO) is a measure of the average number of days that it takes a company to collect payment for a sale. DSO is often determined on a monthly, quarterly, or annual basis. To compute DSO, divide the average accounts receivable during a given period by the total value of credit sales during the same period, and then multiply the result by the number of days in the period being measured.

Depreciation: A reduction in the value of an asset with the passage of time, due in particular to wear and tear.

Direct Method: Direct cash flow is an accounting method that creates a detailed cash flow statement showing the cash changes over an accounting period. The method lists every transaction on the company's cash flow statement. It also identifies changes in cash payments and company activity receipts.

Dividends: A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, the corporation is able to re-invest the profit in the business and pay a proportion of the profit as a dividend to shareholders.

EBITDA: EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization and is a metric used to evaluate a company's operating performance. It can be seen as a proxy for cash flow.

Expenditure: An expenditure is money spent on something. Expenditure is often used when people are talking about budgets.

Expense: Offset (an item of expenditure) as an expense against taxable income.

Financial Statement: Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. ... A balance sheet or statement of financial position, reports on a company's assets, liabilities, and owners equity at a given point in time.

Generally Accepted Accounting Principles (GAAP): A set of rules and guidelines developed by the accounting industry for companies to follow when reporting financial data. Following these rules is especially critical for all publicly traded companies.

Income Statement: One of the three primary financial statements used to assess a company's performance and financial position (the two others being the balance sheet and the cash flow statement). The income statement summarizes the revenues and expenses generated by the company over the entire reporting period. (

Indirect Method: The indirect cash flow method calculates cash flow by adjusting net income with differences from noncash transactions. It starts with a business's net income and then lists cash flows, both received and paid, for various activities (i.e., the three cash flow categories: operating, investing, and financing).

Inventory: A company's inventory typically involves goods in three stages of production: raw goods, in-progress goods, and finished goods that are ready for sale. Inventory or stock refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilization.

Liability: In financial accounting, a liability is defined as the future sacrifices of economic benefits that the entity is obliged to make to other entities as a result of past transactions or other past events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.

Limited Liability Company (LLC): An LLC is a corporate structure where members cannot be held accountable for the company’s debts or liabilities. This can shield business owners from losing their entire life savings if, for example, someone were to sue the company. Can be a single member (much like a sole proprietor) or a multi-member. It shares certain traits of both corporations as well as partnerships or sole proprietorships. It is not a corporation.

Profit: A financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.

Revenue: In accounting, revenue is the income that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. Some companies receive revenue from interest, royalties, or other fees.

S Corporation: An S corporation, for United States federal income tax, is a closely held corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. In general, S corporations do not pay any income taxes.

Salvage Value: Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset's estimated salvage value is an important component in the calculation of a depreciation schedule.

Subchapter C: A C corporation or C corp (named for being in subchapter “C” of the Internal Revenue code) is an independent legal entity owned by its shareholders. A C corporation's profit is taxed twice—as business income at the entity level and the shareholder level when distributed as dividends or realized as capital gains.

Subchapter K: Subchapter K of the Internal Revenue Code of 1954 (sections 701 through 761)1 contains the statutory rules for the taxation of partners and partnerships. Anyone who has tried to gain a working knowledge of these sections will readily agree that one of the most important questions about subchapter K is how one avoids it.

Subchapter S: Subchapter S corporations, or S corporations, are corporations that are taxed on a "flow -through" basis. This means that tax liabilities from income (or deductions from losses) are passed onto the corporations' shareholders to be declared individually.

Supplier: A supplier is an entity that supplies goods and services to another organization. A supplier is usually a manufacturer or a distributor. A distributor buys goods from multiple manufacturers and sells them to its customers. Similar Terms. A supplier is also known as a vendor.

Transaction: In QuickBooks, a transaction type identifies what kind of transaction occurred, such as a customer transaction, bill payment or a bank transfer. When you submit a transaction, you type in a transaction code to represent it.

Uniform Credit Analysis Cash Flow (UCA): The Uniform Credit Analysis, or UCA Cash Flow, is designed to help you identify where the business's cash is going and how it is being used.

Guest Speaker

  • Chuck Borek

CPE Credit

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ATATX Credit

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