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CH-5: BUSINESS ARITHMETIC

CODE:241605010113

TOPIC: CASH FLOW PROJECTION AND FINANCIAL MANAGEMENT

NOTES:

1. Cash flow refers to the movement of money in and out of business.

2. Cash flow projections show how cash is expected to flow in and out of business.

3. Financial management means planning, organizing, directing and controlling the financial activities
such as procurement and utilization of fields of the enterprise.

4. Cash Conversion Cycle: (CCC or Operating Cycle) is the length of time between a firm’s purchase of
inventory and the receipt of cash from accounts receivable.

5. Operating cycle is also reference to the cash consumer cycle.

6. Finance: The provision of money at the time it is wanted

7. Capital structure: The composition of shareholder fund and the borrowed funds.

8. Cash flow: Cash flow refers to the movement of money in and out of a business during a specific
period of time.

Example: Loan Received, Sales Receipts, Sale of Assets.

9. Cash inflow: All receipts of money in the business is known as cash inflow like rent received and loan
received.

10. Cash outflow: It is defined as the movement of money out of a business.

Example: Furniture and Fixtures, Interior Decoration, Tools, Computers, Raw Material.

11.Cash flow projection: Cash flow projection shows how cash is expected to flow in and out of your
business.

12.Cash conversion cycle: (CCC or Operating Cycle) is the length of time between a firm’s purchase of
inventory and the receipt of cash from accounts receivable. It is the time required for a business to turn
purchases into cash receipts from customers.

CCC represents the number of days a firm’s cash remains tied up within the operations of the business.