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    14 ways to control your cash flow [cheat sheet]

    Posted by James Price | JPAbusiness on 27-Sep-2017 05:00:00

    Cash flow is a critical part of the operation of a business.

    If your business were a human body then cash flow would be the system of veins and arteries and the blood that runs through them.

    Cash flow is essential for keeping the body/business alive, active and functioning.

    This cheat sheet contains 14 of our top tips for managing your cash flow. 

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    Topics: Advice, Cash flow, Working capital, Running your business, cheat sheet

    How much stock is too much? [infographic]

    Posted by James Price | JPAbusiness on 12-Oct-2016 05:39:00

    As a rule of thumb, a stock holding that represents 12 months worth of sales is the maximum needed. However, it’s very hard to generalise.

    Some businesses are import oriented so need to commit to a certain level of stock to ensure their freight rate is not exorbitant and/or they have sufficient stock ordered from a single season pre-order. This may cause lumps in their stock holdings.

    At the other end of the scale are products that are rapidly changing in terms of the market acceptance due to changes in technology. A 12-month stock holding of sales in that sector would be far too extensive. Often these stock holdings are measured in days or weeks.

    The first step in determining the correct stock holding for your business is to understand your current Inventory Turnover Ratio (ITR) i.e. your stock turn.

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    Topics: Working capital, Inventory

    Our Working Capital Checklist [free download]

    Posted by James Price | JPAbusiness on 05-Oct-2016 03:36:00

    The levers that impact cash flow and working capital are critical to running a successful business day to day, but they are also critical to building business value over time.

    From a day-to-day point of view, the more cash surplus in the business, the more value in your pocket. Having surplus cash that can be used as working capital also gives your business more options to grow, invest and change.

    Taking the longer-term perspective, ability to generate cash is a critical component when it comes to determining the value of the business should you wish to exit. Banks and potential purchasers will all want to assess your Business Maintainable Earnings (BME), which is essentially a measure of cash generation in the business.

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    Topics: Business Value, Cash flow, Working capital, Running your business

    Why cash flow is critical to exit plans [blog]

    Posted by James Price | JPAbusiness on 16-Sep-2016 03:00:00

     

    In this blog we take a look at some of the key 'working capital levers' typically examined in the due diligence process and how they impact the ultimate price a buyer is willing to pay.

     

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    Topics: Business Value, Selling your business, Cash flow, Working capital, Exiting your business

    Top tips for managing inventory [blog]

    Posted by James Price | JPAbusiness on 02-Sep-2016 03:00:00

    When we started our eBook series one of our first eBooks focused on cash flow.

    Cash Flow Management for Small to Medium-Sized Businesses was written post the GFC, because we saw cash flow management as an important success factor for our clients in managing the dynamics of their businesses in a challenging environment.

    We recently completed the transaction on a business sale for a client and it served as a reminder of how important both cash flow and working capital are to the success of a business.

    In particular, it reminded us how important they are to building business value and therefore, when exiting a business, receiving value from the marketplace.

    Continue reading...

    Topics: Business Value, Cash flow, Working capital, Inventory, Running your business

     
    Disclaimer: The information contained in this blog is general in nature and should not be taken as personal, professional advice. Readers should make their own inquiries and obtain independent, professional advice before making any decisions, taking any action or relying on any information in this blog. 
     
     

     

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