3 answers
Nachanok
Student
Bangkok, Thailand
6
Questions
Asked
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How do you study cash flow?
I want to study cash flow but there are so many things to learn about. Something can be related to one another while I don't even know it existed and more. So how did you approach financial knowledge other than classes? Do you experience it yourself? Is it driven by curiosity? Are there stages of the study? I want to learn about basic financial system until I'm able to form a supposedly strategy, fully aware of the possible outcomes—then I'll later study each types of cash flow for each business
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3 answers
Kenneth Lewis
4
Answers
Heredia, Heredia Province, Costa Rica
Updated
Kenneth’s Answer
Hi Nachanok,
To study cash flow, focus on understanding where money comes from, where it goes, and whether more cash is coming in than going out. Cash flow analysis examines cash movements through three categories: operating, investing, and financing activities.
My suggestion would be to learn:
Operating Activities
- Cash generated from day-to-day business operations
Examples: sales receipts, supplier payments, payroll
Investing Activities
- Cash spent on or received from investments
Examples: buying equipment, selling assets
Financing Activities
- Cash related to funding the business
Examples: loans, debt payments, issuing shares, dividends
Understand the Difference Between Profit and Cash
A business can be profitable and still have cash problems if customers have not paid yet or if large bills are due. Cash flow analysis helps reveal the actual cash available to operate the business.
To study cash flow, focus on understanding where money comes from, where it goes, and whether more cash is coming in than going out. Cash flow analysis examines cash movements through three categories: operating, investing, and financing activities.
My suggestion would be to learn:
Operating Activities
- Cash generated from day-to-day business operations
Examples: sales receipts, supplier payments, payroll
Investing Activities
- Cash spent on or received from investments
Examples: buying equipment, selling assets
Financing Activities
- Cash related to funding the business
Examples: loans, debt payments, issuing shares, dividends
Understand the Difference Between Profit and Cash
A business can be profitable and still have cash problems if customers have not paid yet or if large bills are due. Cash flow analysis helps reveal the actual cash available to operate the business.
Harry Clapeck
Manufacturing
57
Answers
Scottsdale, Arizona
Updated
Harry’s Answer
Hi Nachanok. Don't let your question get the best of you. It isn't that overwhelming of a task.
Think about the question. What is cash flow? Money coming in from? - and money going out to?
Then look at each section to find the sources. This is the digging part, but it is doable.
Compare it to your own cash flow. Where do you get your dollars from? What are the sources? Then reverse the question. Where did you spend your money/ Who got what? Once you understand the questioning process, apply it to businesses.
The next step to learn is cash forecasting. Not only what came in, but how much will be needed for the next time period. This will now help you answer the most important question: Do I (the company) have enough cash to meet future obligations? This helps you determine if the company is sound and healthy or needs to look for some cash infusion (borrowing - or raising cash somehow).
Good luck Nachanok.
Harry
Think about the question. What is cash flow? Money coming in from? - and money going out to?
Then look at each section to find the sources. This is the digging part, but it is doable.
Compare it to your own cash flow. Where do you get your dollars from? What are the sources? Then reverse the question. Where did you spend your money/ Who got what? Once you understand the questioning process, apply it to businesses.
The next step to learn is cash forecasting. Not only what came in, but how much will be needed for the next time period. This will now help you answer the most important question: Do I (the company) have enough cash to meet future obligations? This helps you determine if the company is sound and healthy or needs to look for some cash infusion (borrowing - or raising cash somehow).
Good luck Nachanok.
Harry
I appreciate this, thank you for the advice.
Nachanok
Wong Loke Yuen
Dean; Head of Programme cum Senior Lecturer
765
Answers
Johor Bahru, Johor, Malaysia
Updated
Wong’s Answer
The best way to study cash flow is to start with the basics and build your knowledge step by step. Trying to learn everything at once can feel overwhelming because many financial concepts are connected.
First, you need to understand the three main financial statements: the income statement, balance sheet, and cash flow statement. Learn how they work together and why cash flow is different from profit. This will give you a strong foundation.
Next, you need to study how cash moves through a business. Learn about operating, investing, and financing cash flows. Then explore topics like budgeting, forecasting, working capital, and financial ratios. These concepts will help you understand how businesses manage their money.
After you understand the basics, you can practice by analyzing the financial statements of real companies. Read their annual reports and try to explain where the cash comes from and where it is spent. This is one of the best ways to improve your understanding.
First, you need to understand the three main financial statements: the income statement, balance sheet, and cash flow statement. Learn how they work together and why cash flow is different from profit. This will give you a strong foundation.
Next, you need to study how cash moves through a business. Learn about operating, investing, and financing cash flows. Then explore topics like budgeting, forecasting, working capital, and financial ratios. These concepts will help you understand how businesses manage their money.
After you understand the basics, you can practice by analyzing the financial statements of real companies. Read their annual reports and try to explain where the cash comes from and where it is spent. This is one of the best ways to improve your understanding.