Measuring Net Cashflow
Cashflow is the lifeblood of any business. If the speed you collect cash owing to you is slower than the rate you pay it out to your suppliers, you are going to find it increasingly difficult to find the money to pay your suppliers. Unless this is rectified, you stand a good chance of going bust. Positive cashflow also gives you money to fund your business's growth from your own operations without borrowing. Knowing your cashflow allows you to plan affordable growth. This article introduces Net Cashflow and Marginal Cashflow / Current Ratio concepts for measuring Cashflow health. Periodically measuring your Cashflow situation can make you aware of any looming problems in time to rectify them. Yellow and Blue Belt level.