In the international, and in recent decades in Russian business the definition of cash flow (from the English cashflow - cash flow) is increasingly common. It characterizes the activities of an organization or enterprise, as a result of which an outflow or inflow of means of payment is generated, and is an important criterion for the company's financial balance. Let's study in more detail what is cash flow.

The concept of cash flow and its varieties

Let's take a quick look at the cash flow definition. This is the movement of money through accounts or cash through the cash desk within the framework of one project or enterprise in different directions.

The process, which results in an increase in the amount of money, is a positive cash flow (inflow, receipt). The reverse direction process is an outflow (payment, expense, cost).

From the above, we can conclude that this indicator can ultimately have both positive and negative values.

As part of the overall financial policy of the company, management requires skill in managing cash flows () for its stable development. is the analysis and regulation of the company's financial flows in order to optimize costs and maximize income, in particular:

• development of schedules for receipts and expenditures of means of payment in the context of types; study of the factors influencing the formation of the enterprise's cash flow;
• forecasting a possible shortage of money and sources to cover it;
• determination of directions for investing funds that have been temporarily released.

Financiers distinguish types from the total cash flow depending on the activity that produces them. In particular, the cash flow of the project consists of the following flows:

• from operating activities (operating cash flow, CFO);
• from financial activities (cash flow from financing activities, CFF);
• from investment activity (cash flow from investing, CFI).

In separate undertakings, it is not possible to separate all the movements of finance by type of activity; in such cases, they can be combined all or some of them. In addition, cash flow is classified according to a number of indicators, such as the direction of movement (negative or positive), the level of sufficiency (deficit or excess), scale (by operations, lines of activity), time (future or present), etc.

Clean and free cash flow

The difference between receipts and payments for a certain time period is called net cash flow ( , NCF). This criterion is often taken into account by investors when deciding on the prospects of investing in an investment project. The formula for calculating this indicator looks like this:

• CO - outgoing (negative) flow;
• CI - incoming (positive) flow;
• n is the number of steps.

If we take into account the types of cash flows, then in this case the formula can represent the aggregate value of indicators from different directions, i.e. total balance for different types activities:

For owners or investors, the free cash flow indicator is of great importance. These are the amounts that are accumulated in the accounts and in cash after paying taxes and deducting the cost of capital investments. A higher figure opens up room for the owner to maneuver in terms of investment, increasing the size of dividends, expanding the range of products, and modernizing production.

There are two types, which are calculated differently:

1. FCF from the firm's assets (free cash flow to the firm). This is the movement of finances within the framework of the main activity, excluding investment in fixed assets. In fact, FCFF = FCF, it gives an understanding of how much financial resource an enterprise has after capital expenditures. The criterion is more often used by investors.
2. FCF on equity (free cash flow to equity, FCFE). This is the money that remains after the exclusion of expenses in part of the company's core business, tax payments and bank interest. This indicator is used to assess the value of the company by shareholders.

FCFF is calculated using the following formula:

• EBIT - earnings before interest and taxes;
• Tax - income tax (interest rate);
• DA - depreciation;
• NCWC - the cost of owning new assets;
• ∆WCR - capital expenditures.

• NI is the value of the company's net profit;
• DA - depreciation of intangible and tangible assets;
• ∆WCR - capital expenditures;
• Net borrowing - an indicator of the difference between loans taken and already repaid;
• Investment - the amount of investment.

If the FCF at the end of the step is above zero, then this, in general, indicates the financial attractiveness of the company and the increase in the value of its shares. The negative value of the calculated criterion may be a consequence of the unprofitability of the enterprise or significant investments in its development.

How is the calculation made

Cash flow is usually calculated in relation to the analyzed time intervals (steps), the accepted rules provide for its forecasting monthly in the first year of undertaking, quarterly - in the second year, and then annually. The countdown is made from the basic fixed moment, which can be either the beginning or the end of the zero segment.

You can open cash flow and calculate it in various prices:

• current (basic), prevailing on the market in currently, not taking into account the level of inflation;
• forecast prices that are expected in the future and take into account inflation rates are calculated by multiplying the base price by the inflation index;
• deflated (calculated), these are forecast prices reduced to current moment time by dividing them by the base inflation index.

Cash flow can be calculated in different currencies. The rules recommend calculating the movement of funds in the currencies in which payments are made, and then bringing them all to the final single currency. In Russian statistical reports, the final currency is the Russian ruble, but if there is a need, then separate calculations may be reflected in the resulting additional currency.

Cash flows are calculated by two main methods - direct and indirect.

The direct method relates directly to the component parts accounting such as order journals, general ledger, analytical accounting, which is closer to Russian specialists. This method is convenient to calculate benchmarks for spending and receiving money. Here, the inflow is the predominance of income over expenses, and the outflow is the excess of payments over income. The starting element is sales revenue.

The data for this technique is taken from the Balance of the enterprise (form No. 1), as well as from the Cash Flow Statement (form No. 4), which is analyzed "top down". In particular, NPV from financial activities are calculated exclusively by this method. Such an analysis makes it possible to approximately explain the discrepancy between the value of the company's cash flow for the reporting period and the profit received during the same time. At the same time, he is not able to reveal the relationship between the magnitude of the change in money and the financial result.

Cash flow calculation example by direct method:

Name of indicator	Period 1	Period 2	Period 3	Period 4
1. Balances at the beginning of the period under review
2. Receipts, including:
advances and proceeds from the sale of goods;
interest, dividends and other inflows;
loans and credits
3. Payments, including:
payment for services, works, goods, advance payments;
budgetary payments (transfers of taxes and contributions to obligatory funds);
remuneration of personnel;
financial investments;
expenses for fixed assets;
repayment of loans
4. Cash flow (receipt - payments)
5. Balances at the end of the period

The indirect method is more suitable for analytics, it is based on sequentially adjusting recorded profits by subtracting expenses and adding non-cash flow income. This method gives an understanding of the relationship between working capital and financial results. IN this case form No. 4 of the balance sheet is disclosed "from the bottom up". The adjustments mentioned include:

• balance sheet items that are not of a monetary nature (losses and profits of previous periods, depreciation, exchange rate differences);
• change in the amount of inventories, receivables, short-term financial liabilities and investments (except for loans and credits);
• other items that can be classified as financial or investment activities.

An example of calculating cash flow using the indirect method:

Moving money	Period 1	Period 2	Period 3	Period 4
Operating activity
Growth:
net profit;
growth of accounts payable;
depreciation
Decrease:
rising costs and inventories;
growth in accounts receivable
Cash flow from operating activity
Investment activity:
sale of fixed assets;
acquisition of fixed assets
Cash flow from investment activity
Financial activities:
dividend payment;
dynamics of credits and loans;
bill dynamics
Cash flow from financial activities
Total cash flow
Financials at the start date of the period
Financials at the end date of the period

The accuracy of the forecast regarding the future movement of funds depends, first of all, on the accuracy and correctness of the calculations of such indicators:

• the volume of capital expenditures at the initial stage and during the life cycle of the project;
• expenses for the production and sale of products intended for release, as well as a forecast of expected sales volumes;
• stepwise need for third-party finance.

Qualitative cash flow forecasting enables potential investors to foresee the potential and expected profitability of the initiative under consideration with a high degree of probability.

Purpose and objectives of cash flow management

Topic 8. Cash flow management of the organization

Implementation of all types of financial and business transactions organization is accompanied by the movement of funds - their receipt or expenditure. This continuous process is defined by the concept cash flow.

Cash flow- a set of time-distributed cash inflows and outflows.

Management Goal cash flows - Ensuring the financial balance of the organization in the process of its development by balancing the volume of receipts and expenditures of funds and their synchronization in time.

Tasks of cash flow management:

formation of a sufficient amount of funds of the organization in accordance with the needs of its economic activity;

optimization of the distribution of the volume of formed monetary resources organizations in the areas of economic activity;

ensuring a high level financial stability and solvency of the organization;

· maximizing the growth of net cash flow, ensuring the specified pace of development of the organization;

· minimization of losses in the value of funds in the process of their economic use.

Allocate the following types cash flows.

· By type of activity allocate cash flows from current (operating), financial and investment activities.

· Direction of cash flow allocate positive cash flow, characterizing the totality of cash receipts and negative cash flow, characterizing the totality of payments.

· By calculation method allocate gross cash flow, representing the totality of receipts and expenditures of funds and net cash flow, representing the difference between positive and negative cash flows.

· According to the degree of continuity single out regular ones, i.e. providing for equal intervals between payments and irregular (discrete).

· By volume sufficiency allocate excess cash flow, representing the excess of cash inflows over their outflows and deficit cash flow, in which cash receipts are lower than the organization's needs for spending them.

cash flows organizations in all forms and types, and, accordingly, the total cash flow are the most important independent object of financial management.

The system of key indicators characterizing the cash flow includes:

the volume of cash receipts;

the amount of money spent;

the volume of net cash flow;

the amount of cash balances at the beginning and end of the period under review;

check amount of funds;

· Distribution of the total amount of cash flows of certain types for certain intervals of the period under review. The number and duration of such intervals are determined by the specific tasks of analyzing or planning cash flows;

· assessment of factors of internal and external nature, influencing the formation of cash flows of the organization.

Cash flow is carried out in three types of activities:

current (main, operational) activity;

· investment activities;

· financial activities.

Current (main, operating) activities- the activity of the organization, pursuing the extraction of profit as the main goal, or not having the extraction of profit as such in accordance with the subject and objectives of the activity, i.e., the production of industrial, agricultural products, the implementation construction works selling goods, providing services Catering, harvesting agricultural products, leasing property, etc.

Tributaries along current activities:

receipt of proceeds from the sale of products (works, services);

Receipts from the resale of goods received by barter;

Receipts from the repayment of receivables;

advances received from buyers and customers.

Outflows from current activities:

payment for purchased goods, works, services;

Issuance of advances for the purchase of goods, works, services;

payment of accounts payable for goods, works, services;

· salary;

payment of dividends, interest;

· payment according to calculations on taxes and fees.

Investment activities- activities of the organization related to the acquisition of land, buildings, other real estate, equipment, intangible assets and other non-current assets, as well as their sale; with the implementation of own construction, expenses for research, development and technological development; with financial investments.

Inflows from investment activities:

receipt of proceeds from the sale of non-current assets;

receipt of proceeds from the sale of securities and other financial investments;

income from the repayment of loans granted to other organizations;

receiving dividends and interest.

Outflows from investment activities:

payment for acquired non-current assets;

payment of acquired financial investments;

· issuance of advances for the acquisition of non-current assets and financial investments;

granting loans to other organizations;

· Contributions to authorized (share) capitals of other organizations.

Financial activities- the activity of the organization, as a result of which the value and composition of the organization's own capital, borrowed funds change.

Cash inflows from financing activities:

Receipt from the issue of equity securities;

income from loans and credits provided by other organizations.

Outflows from financial activities:

repayment of loans and credits;

Repayment of financial lease obligations.

The cash flows generated by the current activities of the organization often go into the sphere of investment activities, where they can be used to develop production. However, they can also be directed to the sphere of financial activity for the payment of dividends to shareholders. Current activities are quite often supported by financial and investment activities, which ensures additional capital inflow and the organization's survival in a crisis situation. In this case, the organization ceases to finance capital investments and suspends the payment of dividends to shareholders.

The cash flow from current activities is characterized by the following features:

current activity is the main component of all business activities of the organization, so the cash flow generated by it should occupy the largest specific gravity in the total cash flow of the organization;

Forms and methods of current activities depend on industry specifics, therefore, in different organizations cash flow cycles of ongoing activities can vary significantly;

· Operations that determine the current activity are distinguished, as a rule, by regularity, which makes the monetary cycle quite clear;

· Current activity is focused mainly on the commodity market, so its cash flow is related to the state of the commodity market and its individual segments. For example, a shortage of inventories in the market can increase the outflow of money, and overstocking finished products can reduce their influx;

current activities, and hence its cash flow, are inherent in operational risks that can disrupt the cash cycle.

Fixed assets are not included in the cash flow cycle of current activities, since they are part of investing activities, but it is impossible to exclude them from the cash flow cycle. This is explained by the fact that current activities, as a rule, cannot exist without fixed assets, and in addition, part of the costs of investment activities is reimbursed through current activities through depreciation of fixed assets.

Thus, the current and investment activities of the organization are closely related. The cash flow cycle from investing activities is the period of time during which cash invested in non-current assets will return to the organization in the form of accumulated depreciation, interest or proceeds from the sale of these assets.

The cash flow from investing activities is characterized by the following features:

· the investment activity of the organization is subordinate in relation to the current activities, so the inflow and outflow of funds from investment activities should be determined by the pace of development of current activities;

Forms and methods of investment activity are much less dependent on the industry characteristics of the organization than current activities, therefore, in different organizations, the cycles of cash flows of investment activities are, as a rule, almost identical;

· the inflow of funds from investment activities in time is usually significantly distant from the outflow, i.e. the cycle is characterized by a long time lag;

investment activity has various forms (acquisition, construction, long-term financial investments, etc.) and different directions of cash flow in certain periods of time (as a rule, initially outflow prevails, significantly exceeding inflow, and then vice versa), which makes it difficult to represent the cycle of its cash flow flow in a fairly clear pattern;

· investment activity is associated with both commodity and financial markets, the fluctuations of which often do not coincide and can affect the investment cash flow in different ways. For example, an increase in demand in the commodity market may give the organization an additional cash inflow from the sale of fixed assets, but this, as a rule, will lead to a decrease in financial resources in the financial market, which is accompanied by an increase in their value (percentage), which, in turn, may lead to an increase in the cash outflow of the organization;

The cash flow of investment activities is affected by specific types of risks inherent in investment activities, united by the concept investment risks, which are more likely to occur than operational ones.

The cash flow cycle of financial activity is the period of time during which money invested in profitable objects will be returned to the organization with interest.

The cash flow from financing activities is characterized by the following features:

financial activity is subordinate in relation to the current and investment activities, therefore, the cash flow of financial activities should not be formed to the detriment of the current and investment activities of the organization;

the volume of cash flow of financial activities should depend on the availability of temporarily free cash, so the cash flow of financial activities may not exist for every organization and not constantly;

financial activity is directly related to the financial market and depends on its state. A developed and stable financial market can stimulate the financial activity of the organization, therefore, provide an increase in the cash flow of this activity, and vice versa;

· financial activities are characterized by specific types of risks, defined as financial risks, which are characterized by a special danger, therefore, they can significantly affect the cash flow.

The cash flows of the organization are closely related to all three types of its activities. Money constantly "flows" from one activity to another. The cash flow of current activities, as a rule, should fuel investment and financing activities. If there is a reverse direction of cash flows, then this indicates an unfavorable financial position organizations.

Depending on the type of activity, cash flows are distinguished by operating, investment and financial activities.

Operating activities generates the organization's main revenue and main cash flows.

Operational (current) activity is the activity of an organization that pursues profit making as the main goal, or does not have profit making as such a goal in accordance with the subject and goals of the activity.

So, cash flows from operating activities mainly arise from the main, income-generating activities of the organization and are the result of transactions and events included in the definition of net profit (loss). Operating cash flows include:

• cash receipts from the sale of goods, products, performance of work, provision of services, repayment of receivables, rent and other income;
• cash payments to suppliers of raw materials, materials and services, salaries to staff, taxes and fees to the budgets of all levels and extra-budgetary funds, interest on loans and borrowings and other payments related to the implementation of the operational process.

Investment activities the activity of the company is considered to be related to capital investments in connection with the acquisition of fixed assets, intangible assets and other non-current assets, as well as their sale; with the implementation of long-term financial investments in other enterprises, the sale of securities, other financial investments, etc.

Thus, investment activity is the acquisition and sale of long-term assets and financial investments that are not cash equivalents.

financial activities companies are considered to be activities related to the implementation of short-term financial investments, the issuance of shares and other securities, the attraction and repayment of loans, etc. Financial activity results in changes in the size and structure of equity and borrowed capital (with the exception of current accounts payable).

In the most concentrated form, the classification of cash flows according to various criteria can be presented in tabular form:

Classification sign	Name of cash flow
1. The scale of servicing financial and economic processes (management level)	Enterprise cash flow
	Cash flow of the structural unit
	Cash flow of a single business transaction
2.View financial and economic activities	Total cash flow
	Cash flow of current activities
	Cash flow from investing activities
	Cash flow of financial activities
3. Direction of travel	Incoming cash flow (inflow)
	Outgoing cash flow (outflow)
4. Form of implementation	Non-cash cash flow
	cash flow
5. Scope of circulation	External cash flow
	Internal cash flow
6. Duration	Short term cash flow
	Long term cash flow
7. Sufficiency of volume	Excess cash flow
	Optimal cash flow
	Deficient cash flow
8. Type of currency	Cash flow in national currency
	Cash flow in foreign currency
9. Predictability	Planned cash flow
	Unplanned cash flow
10. Continuity of formation	Regular cash flow
	Discrete cash flow
11. Stability of formation time intervals	Regular cash flow with regular time intervals
	Regular cash flow with irregular time intervals
12. Evaluation over time	Current cash flow
	Future cash flow

Let us briefly characterize each group of this classification.

1. Depending on the scale of servicing financial and economic processes the most generalizing is the cash flow of the enterprise. It is characterized by the receipt and use of funds at the level of the enterprise as a whole.

The cash flow of each structural unit separately becomes an independent subject of research as a result of the allocation of branches, representative offices and other structural divisions enterprises as separate objects of management.

The existence of a cash flow of a separate business transaction depends on the ability to single out this business transaction as a separate component of all financial and economic processes of the enterprise and on the ability to determine the cash flow associated with it.

2. By types of financial and economic activities, the most aggregated is the total cash flow. It is characterized by any cash flow occurring at the level of the object of study.

The cash flow of current activities is characterized by the receipt of funds from buyers (customers) and their use associated with the provision of the production process, the performance of work, the provision of services, the sale of purchased goods, etc.

The cash flow of investment activities is formed when the enterprise carries out activities related to investments in non-current assets, as well as their sale.

The cash flow of financial activities is characterized by the movement of funds in connection with the implementation of short-term financial investments by the enterprise and the disposal of shares, bonds, etc. previously acquired for up to 12 months.

3. Direction of cash flow there are two cash flows: incoming and outgoing.

Incoming cash flow (inflow) is characterized by a set of cash inflows to the enterprise for a certain period of time.

Outgoing cash flow (outflow) is characterized by the total use (payments) of funds by the enterprise for the same period of time.

4. By form of implementation there are two cash flows: non-cash and cash.

A feature of non-cash cash flow is its formation at the enterprise only in the form of entries in accounting accounts.

Cash flow is characterized by the receipt or payment by the enterprise of banknotes and coins.

5. Depending from the sphere of circulation The cash flow of an enterprise can be external or internal.

External cash flow is characterized by the receipt of funds from legal entities and individuals, as well as the payment of funds to legal entities and individuals. It helps to increase or decrease the cash balance of the enterprise.

Internal cash flow is characterized by a change in the location and form of funds that the company has. It does not affect their balance, as it constitutes an internal turnover.

6. By duration cash flow is divided into short-term and long-term.

Investments of funds in other objects for a period of up to one year constitute a short-term cash flow.

If the term exceeds one year, then the cash flow is characterized as long-term.

7. By volume sufficiency the cash flow of the enterprise can be excessive, scarce or optimal.

Excessive cash flow is characterized by the excess of cash receipts over the current needs of the enterprise. Its evidence is the high positive value of the net cash balance not used by the enterprise in the process of financial and economic activities.

When incoming cash is not enough to meet the current needs of the enterprise, a scarce cash flow is formed. Even with a positive value of the amount of the net cash balance, it can be characterized as a deficit if this amount does not provide the planned need for cash in all the provided areas of the financial and economic activity of the enterprise. The negative value of the sum of the net cash balance automatically makes this flow scarce.

The optimal cash flow is characterized by a balance between the receipt and use of funds, which contributes to the formation of their optimal balance, which allows the company to fulfill its obligations in a timely manner, which require settlements only in monetary form while maintaining the highest possible return on cash.

8. By type of currency. The cash flow of an enterprise is characterized as a cash flow in the national currency, if the unit of account is the monetary unit of the country in which the enterprise is located. The cash flow in foreign currency is formed at the enterprise if the unit of account is the monetary unit of another country.

9. By predictability. The planned cash flow is characterized by the ability to predict in what amount and when the funds will be received by the enterprise or will be used by it. The cash flow that occurs at the enterprise unscheduled is characterized as an unplanned cash flow.

10. Depending from the continuity of formation A company can have a regular cash flow and a discrete cash flow.

Regular cash flow is characterized by the receipt and use of funds, which in the period under review are carried out constantly at separate intervals. Discrete cash flow is characterized by cash flow associated with the implementation of single financial transactions.

11. According to the stability of time intervals of formation:

• regular cash flow with uniform time intervals within the period under review. Such a cash flow of receipt or expenditure of funds is in the nature of an annuity;
• regular cash flow with uneven time intervals within the period under review. An example of such a cash flow is a schedule of lease payments for leased property with uneven time intervals agreed upon by the parties for their implementation throughout the period of leasing the asset.

12. According to the method of evaluation in time distinguish the following types of cash flow:

• current cash flow. It characterizes the cash flow of the enterprise as a single comparable value, reduced in value to the current point in time;
• future cash flow. It characterizes the cash flow of an enterprise as a single comparable value, reduced in value to a specific future point in time. The concept of future cash flow can also be used as its nominal identified value in the upcoming moment of time (or in the context of intervals of the future period), which serves as a discounting base in order to bring it to the present value.

The use of the presented classification in practice will allow more targeted accounting, analysis and planning of cash flows in order to effectively manage them.

Cash flow definition, cash flow analysis

Information about the definition of cash flow, cash flow analysis

1. Definition

Definition

In the form of symbols

Clarifications

2. Cash flow analysis

3. Cash flow management system

4. Key Factors Affecting Cash Flow

5. Briefly about the main

1. Definitioncash flow

A cash flow or cash flow is a series of numbers abstracted from its economic content, consisting of a sequence of received or paid money distributed over time. Cash flow management is based on the concept of cash circulation. For example, money is converted into inventories, receivables and back into money, closing the cycle of the company's working capital. When the cash flow is reduced or blocked completely, the phenomenon of insolvency occurs. An enterprise may feel a lack of funds even if it formally remains profitable (for example, the terms of payments by the company's customers are violated). It is with this that the problems of profitable, but illiquid companies that are on the verge of bankruptcy are connected.

The generally accepted designation for the payment stream is CF. Number series designation - CF0, CF1, ..., CFn. An individual member of such a series can have both a positive and a negative value.

In essence, cash flow is the difference between the income and costs of an economic entity (usually a company), expressed as the difference between payments received and payments made. In general, this is the sum of the firm's retained earnings and its depreciation charges (see Depreciation) saved to form its source of cash for the future renewal of fixed capital. In other words, Cash Flow is the net amount of money actually received by the firm in a given period. In many translated works, this concept is expressed by the terms “cash flow” or “cash flow”, which is clearly unfortunate, since the words “Cash” in English and “cash” in Russian are very different in terms of the terms they cover. For example, the cash flow includes depreciation charges or changes in the entries in the bank accounts of the company (in case of non-cash payments): neither of these have absolutely nothing to do with cash in the generally accepted sense.

2. Cash flow analysis

The analysis of cash flow is, in essence, the determination of the moments and magnitudes of inflows and outflows of cash. The purpose of cash flow analysis is, first of all, an analysis of the financial stability and profitability of the enterprise. Its starting point is the calculation of cash flows, primarily from operating (current) activities. Its starting point is the calculation of cash flows, primarily from current activities.

Cash flow characterizes the degree of self-financing of the enterprise, its financial strength, potential, profitability.

The financial well-being of the enterprise largely depends on the inflow of funds to cover its obligations. The absence of the minimum required cash reserve may indicate financial difficulties. An excess of cash can be a sign that the business is incurring losses.

It is convenient to analyze cash flows using the cash flow statement. According to international standard IAS7, this report is generated not by sources and directions of use of funds, but by areas of activity of the enterprise - current, investment and financial. It is the main source of information for cash flow analysis.

The components of the cash flow statement are the receipt and disposal of cash in the context of the current, investment and financial activities of the organization.

Current activities include the impact on cash of business transactions that affect the profits of the entity. This category includes such operations as the sale of goods (works, services), the purchase of goods (works, services) necessary in the production activities of the organization, the payment of interest on a loan, payments on wages, tax transfers.

Investment activity is understood as the acquisition and sale of fixed assets, securities, the issuance of loans, etc.

Financial activities include receiving from the owners and returning to the owners of funds for the company's activities, operations on repurchased shares, etc.

Drawing up a cash flow statement involves:

Determination of funds as a result of the current activities of the organization;

Determination of funds as a result of the investment activity of the organization;

Definition of cash as a result of the financial activities of the organization.

To do this, use the data of the balance sheet and income statement.

The profit and loss statement shows how profitable the activity was for the organization in the analyzed period, but it cannot show the inflow and outflow of funds in the current, investment and financial activities of the company.

The profit and loss statement is prepared on an accrual basis, when income/expenses are recognized in the period of their occurrence, and not in the period of inflow/outflow of funds.

In order to reveal the cash flow, it is necessary to transform the income statement. In this case, adjustments are used, in accordance with which income is recognized only in the amount of actually received cash, and expenses in the amount of actual payments.

There are two methods of income statement transformation: direct and indirect.

At direct method Cash Flow transforms each item of the profit and loss statement, in the process of which the actual cash flow and the actual expense are determined. The indirect method does not require the transformation of each line item in the income statement. According to this method, the starting point of the calculation is the amount of annual profit (loss) for the analyzed reporting period, which is adjusted by adding all expenses not related to the movement of cash (for example, depreciation), and subtracting all income not related to cash flows.

Before drawing up a cash flow statement, first of all, it is necessary to find out which balance sheet item for at least two periods was the source of cash flow and which caused its consumption. This is done using a table showing the sources of formation and consumption of enterprise funds. First, the change in each balance sheet item is calculated, after which this change is attributed to the sources or consumption of funds in accordance with the following rules:

The source of available cash is any increase in an item classified as Liabilities or Equity. An example is a bank loan.

Any decrease in active accounts is also a source of cash flow generation. Examples: sale of non-current assets or inventory reduction.

Consumption:

Consumption of funds represents any decrease in an account classified as a "Liabilities" or "Equity". An example of the consumption of available funds is the repayment of a loan.

Any increase in active balance sheet items. The acquisition of non-current assets, the formation of stocks are examples of cash flow consumption.

The formation and consumption of cash flow occur in any type of activity of the company. The table below shows which operations related to a particular field of activity (production, investment, financial) caused an inflow (+) and which caused an outflow (-) of the firm's cash.

The source of available cash is any increase in an item classified as Liabilities or Equity. An example is a bank loan. Any decrease in active accounts is also a source of cash flow generation. Examples: sale of non-current assets or inventory reduction.

3. Cash flow management system

When building a cash flow management system, it is important to optimize the relevant business processes, for which it is necessary to determine:

The composition of the CFD, according to which the budgets of funds are formed and controlled;

Participants in the process, that is, company employees acting as initiators of payments, controllers for the implementation of internal regulations, acceptors;

Duties and powers of each participant in the business process, in particular, to determine payment limits, and those responsible for making decisions on certain payments;

The time schedule for the passage of payments, in particular, to establish the timing and sequence of the passage of applications for payment.

planning and control;

In the future, this will reduce the labor costs of the company's top managers (general and financial directors) to control the spending of funds. If previously they had to review and sign each application for payment, now that the costs are approved in the budgets, and the procedure for coordinating payments is formalized, control over cash flows can be entrusted to the financial manager. Accordingly, the financial (general) director will coordinate only a limited number of payments, usually over-limit, large or irregular. For example, it is enough to agree on the amount of payment for renting an office once when approving the budget, leaving control of the payment procedure itself and the compliance of the amounts with the budget with the financial manager.

Properly built business processes help to solve another urgent problem - to minimize the risk of abuse by employees of the enterprise by separating the functions of monitoring payments and their initiation. For example, the head of a business area accepts all applications for payment in his CFD and is responsible for budget execution, and an employee of the financial service (this may be a financial director, Financial Manager) controls the compliance of applications with budget limits and the implementation of the regulatory procedures of the payment system.

Effective cash flow management increases the degree of financial and operational flexibility of the company, as it leads to:

Improving operational management, especially in terms of balancing receipts and expenditures of funds;

Increasing sales volumes and optimizing costs due to greater opportunities for maneuvering the company's resources;

Improving the efficiency of managing debt obligations and the cost of servicing them, improving the conditions for negotiations with creditors and suppliers;

Creation of a reliable base for evaluating the performance of each of the divisions of the company, its financial condition generally;

Increasing the company's liquidity.

As a result, a high level of synchronization of receipts and expenditures of funds in terms of volume and time makes it possible to reduce the real need of the enterprise for the current and insurance balances of monetary assets serving the core activity, as well as the reserve of investment resources for real investment.

Such balancing of cash inflows and outflows at the planning stage is carried out by developing a cash flow budget (BCDS), the format of which depends on the characteristics of the business of a particular enterprise. The result of the calculations is the determination of the net cash flow for budget period, reflected in a separate line as "cash growth or decrease" depending on its value (positive or negative) and the balance of funds at the end of the planning period. If the latter is negative or less than the minimum standard, then, firstly, an analysis of cash inflows and outflows is carried out in order to identify additional reserves, and secondly, a credit plan is drawn up to attract external sources financing.

The decision to attract a loan is made subject to greater economic feasibility this method external financing compared to other available ways to cover the cash gap (increase in advances from buyers, change in commercial loan conditions, increase in sustainable liabilities). Currently, banks offer various loan products: overdraft, term loans, credit lines, bank guarantees, letters of credit, etc. To eliminate short-term cash gaps, it is preferable to use an overdraft, but with the constant use of borrowed capital, the choice of types of loan products should be based on taking into account the effect of financial And operating leverage.

4. Key Factors Affecting Cash Flow

All factors influencing the formation of cash flows can be divided into external and internal. TO external factors include: the conjuncture of the commodity and financial markets, the system of taxation of enterprises, the established practice of lending to suppliers and buyers of products (rules of business), the system for carrying out settlement operations of economic entities, the availability of external sources of financing (credits, loans, targeted financing).

Among internal factors stage should be life cycle where the enterprise is located, the duration of the operating and production cycles, the seasonality of production and sales of products, the depreciation policy of the enterprise, the urgency of investment programs, the personal qualities and professionalism of the management of the enterprise.

The construction of an enterprise cash flow management system is based on the following principles:

Informative reliability and transparency;

planning and control;

Solvency and liquidity;

Rationality and efficiency.

The basis of management is the availability of operational and reliable accounting information, formed on the basis of accounting and management accounting. The composition of such information is very diverse: the movement of funds in the accounts and cash of the enterprise, receivables and payables of the enterprise, budgets for tax payments, schedules for issuing and repaying loans, interest payments, budgets for upcoming purchases requiring advance payment, and much more. The information itself comes from various sources, its collection and systematization must be debugged with particular care, since delays and errors in providing information can lead to serious consequences for the entire company as a whole. At the same time, each enterprise independently determines the format for providing information, the frequency of collecting information, and the workflow scheme.

But the main role in managing cash flows is given to ensuring their balance in terms of types, volumes, time intervals and other essential characteristics. To successfully solve this problem, it is necessary to introduce planning, accounting, analysis and control systems at the enterprise. After all, planning the economic activity of an enterprise in general and cash flow in particular significantly increases the efficiency of cash flow management, which leads to:

Reducing the current needs of the enterprise in them based on an increase in the turnover of monetary assets and receivables, as well as the choice of a rational structure of cash flows;

Efficient use of temporarily free cash (including insurance balances) by making financial investments of the enterprise.

ensuring a surplus of funds and the necessary solvency of the enterprise in the current period by synchronizing positive and negative cash flows in the context of each time interval.

Thus, cash flow management is the most important element of the financial policy of the enterprise; it permeates the entire management system of the enterprise. The importance and importance of cash flow management in an enterprise can hardly be overestimated, since not only the stability of the enterprise in a specific period of time, but also the ability to further develop, achieve financial success in the long term depends on its quality and efficiency.

5. Briefly about the main

Cash flows reflect the income and expenses of economic entities. By analyzing cash flows, you can find out the degree of financial stability, self-financing of the enterprise, its financial strength, financial potential, profitability. Cash flow management is the most important part of the financial policy of the enterprise, which permeates the entire management system of the enterprise.

Sources

en.wikipedia.org - Wikipedia-The Free Encyclopedia

slovari.yandex.ru - Yandex.Dictionaries

www.wikiznanie.ru - free encyclopedia

www.financial-lawyer.ru - IA "Financial Lawyer"

www.cfin.ru - Website "Corporate Management"

www.bizuchet.ru - Project "Bizuchet"

One of the directions of financial management of enterprises is the effective management of cash flows. A complete assessment of the financial condition of an enterprise is impossible without an analysis of cash flows. One of the objectives of managing these flows is to identify the relationship between them and profit, for which it is necessary to know whether the profit received is the result of effective cash flows or is it the result of some other factors.

To understand this issue, it is necessary to understand what is meant by the terms "cash flow" and "cash flow".

Flow of funds - This is the transfer of money to someone, both in cash and non-cash. The movement of money is the fundamental principle, as a result of which finances arise, i.e. financial relations, cash funds, cash flows.

cash flow An enterprise is the aggregate of all its receipts and payments for a certain period of time. In world practice, cash flow is called "cash flow" (English cash flow, although the literal translation of this term means "cash flow").

Cash flows differ from a simple transfer of money in a number of ways:

• o this is the result of the monetary relations arising in the enterprise, which are the result of the movement of money;
• o organized and managed processes;
• o processes limited to a certain period of time, that is, having time limits - the beginning and end;
• o cash flow as an indicator has a number of economic characteristics: intensity, liquidity, profitability, sufficiency.

Degree cash flow intensity - this is an increase or decrease in its value over a certain period of time, i.e. the maximum flow is intense.

Cash flow liquidity - it is the excess of positive (receipt) over negative (payments). Return on cash flow is not its important characteristic, it is calculated, for example, as the ratio of net cash flow to inflows or outflows. Sufficiency of cash flow determined by its excess or deficiency.

Cash inflows (receipts) and outflows (payments) over a period of time are components of the cash flow. A set of inflows or receipts is a positive cash flow, and a set of cash outflows or payments is a negative cash flow.

Net cash flow - is the difference between the sum of inflows and outflows. The net flow is one of the financial results of the enterprise along with such indicators as profit and profitability. Note that this is a specific result, since the company should not set as its goal the growth of net cash flow unnecessarily. Net flow can be either positive or negative. A positive cash flow is a positive net flow, and a negative cash flow is a negative net flow.

A positive net flow, or a positive cash flow, can be either excess or deficit. Excess flow means a significant excess of cash receipts over demand. Deficient cash flow characterizes the opposite phenomenon, when receipts are not enough to cover the need. Negative flow, of course, is always scarce. The excess and scarcity of cash flow are indicators that are similar in content to indicators such as profitability and unprofitability (the use of the latter is also quite legitimate).

A time estimate defines the cash flow as present and future. The present flow is determined in the estimation of the present time, and the future flow is determined in the estimation of some future specific point in time by discounting, i.e. bringing future cash flows into a comparable form with the present.

The goal of cash flow management is to balance positive and negative cash flows over time, synchronizing them on a weekly, ten-day basis, or as needed.

Unbalanced flows make at some point the cash flow as a whole illiquid, and the company insolvent. Obviously, the main ways to balance threads are:

• o increase in funds in the turnover of the enterprise and, above all, its own;
• o increase in revenue through additional sales;
• o reduction in payments.

Balanced cash flow is liquid. The indicator is the liquidity ratio, which is defined as the ratio of positive flow (inflows) to negative flow (outflows). The minimum value of this indicator is equal to one.

The balance of the cash flow is ensured by its planning, primarily through the development of operational financial plan, the so-called payment calendar. It is developed for a month with a frequency of 5, 10, 15 days. The peculiarity of the payment calendar is that the company first determines all its cash expenses for the month, and then seeks sources of funds to cover expenses if cash income is not enough. The development of an economically sound payment calendar is one of the mandatory conditions effective cash flow management.

As already noted, cash flows are associated with cash inflows and outflows (Table 8.1).

Table 8.1. Cash inflows and outflows by type of activity

tributaries	Outflows
Primary activity
1. Sales revenue. 2. Receipts of receivables. 3. Advances from buyers and customers. 4. Miscellaneous income	1. Payment of production and sales costs. 2. Repayment of accounts payable. 3. Tax payments to budgets and off-budget funds. 4. Other payments
Investment activities
1. Proceeds from the sale of fixed assets, intangible assets, construction in progress. 2. Receipts from the sale of long-term financial investments. 3. Dividends, interest on long-term financial investments. 4. Miscellaneous income	1. Capital investments for the development of production. 2. Long-term financial investments. 3. Others
Financial activities
1. Receipts from external sources to increase the company's own funds (from the issue of shares, from founders and owners, etc.). 2. Long-term credits and loans. 3. Short-term credits and loans. 4. Targeted funding 5. Miscellaneous income	1. Repayment of long-term credits and loans. 2. Repayment of short-term credits and loans. 3. Payment of dividends and interest. 4. Other payments

The need to divide the activities of the enterprise into three types (main, investment, financial) is explained by the role of each of them and their relationship. If the main activity is the main source of profit, then investment and financial activities are designed to contribute, on the one hand, to the development of the main activity, on the other hand, to provide it with additional funds.

By and large, the division of the enterprise into types is one of the ways to ensure a balance in the income and payments of the enterprise. For these purposes, enterprises develop a cash flow plan for the quarter (Table 8.2).

Table 8.2.

Thus, the main objects of cash flow management are:

• o positive flow - tributaries;
• o negative flow - outflows;
• o cash balance.

Cash flow planning for the year is carried out using the so-called cash budget, which is also called the cash flow budget or, as it is often called, the cash flow budget, abbreviated as KB, BDP, BDDS. Budgets at the enterprise are developed, as a rule, for one year, but this can be done for three, six months, and for another period.

Some businesses plan cash flows according to certain types income and expenses, assets and liabilities, etc.

The main ways to strengthen the finances of enterprises are related to the optimization of the funds used by them and the elimination of their deficit.

Corporate finance is the most important category market economy. They play a decisive role in the system of financial relations of the state, therefore professional management they contribute to solving not only the problems of enterprise finance, but also such problems as inflation, budget deficit, monetary policy, development stock market, corruption, etc.