Managing cash flow from operating activities
Managing cash flow from operating activities includes:
• forecasting incoming cash receipts from sales of products (services, works);
• forecasting other incoming cash flows from operating activities;
• assessing the impact of changes in receivables, deferred to the volume of incoming cash flows from operating activities;
• forecasting outgoing cash flows include payments to suppliers, debt repayment, interest payments, payroll and other operating payments, payments to the budget for sales tax and income;
• definition of net cash flow from operating activities.
These calculations are used as stages in the planning and in determining the actual amounts of net cash flow from operating activities.
Most significant part of the cash flows of the enterprise is the proceeds from the sale of goods, services, works, ie from operating activities. Sales of products - a business transaction that involves the transfer of ownership of the products to another entity in exchange for an equivalent amount of money or debt.
Forecast cash receipts from sales includes the following steps:
• demand analysis and identification of possible sales on the range and variety of products;
• justification of the price level, which would ensure realization and profitability of production;
• study plan of production necessary production facilities, labor and material resources;
• estimate of cash receipts from sales.
The composition of the initial cash flows include the amount of interest paid, the sales tax and income tax. Expected values of these parameters are determined based on the planned sales, conditions of repayment the loan agreements and so on.