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Funding a business
Why Cash Flow Is Important?
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[QUOTE="Abigael, post: 214834, member: 25357"] Personally, I understand cash flow as that money that circulates within the business. As you said, one starts a business using capital from different sources. It could be from a loan, or your saved money, income earned from your job or funds received from friends and family. This capital is used to set up the business; to pay rent needed and buy the stock that the business will be selling. Once you start selling in your business, you earn income which includes profits made from the capital you invested. Of which you will use the money to buy more stock. You can either put aside the profits or reinvest it back to the business. That is what I understand with cash flow. It is so important to every business to keep this cash flow positive. This is by making sure that you don't end up going bankrupt. Therefore, financial management is very important for a business person. It enables you to spend the money wisely such that you always have enough for buying stock and paying your bills. Keeping a positive cash flow also enables a business to grow. Especially if you choose to plough back profits more than spending it all. You end up having so much to sell and that grows your business greatly. [/QUOTE]
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Why Cash Flow Is Important?
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