| Title: |
How to Generate, Project & Report Cash Flows |
| Prerequisite: |
None |
| Advance Preparation: |
None |
| Knowledge Level: |
Basic |
| Subject Matter Area: |
Accounting and Auditing |
| Date of Publication: |
April 2009 |
| Copyright © |
2009 by Bisk Education, Inc. All rights reserved. |
| Recommended CPE Credits: |
6 QAS/Registry (50-minute hour) |
| Expiration Date: |
One year from date of receipt to complete program and submit quizzer to obtain credit |
| Passing Grade for Quizzer: |
70 percent or higher |
Dell is a cash generating machine. Dell doesn't get loans to finance its operations or fund its market share growth. Dell hasn't sold additional stock in decades. Dell has mastered the concepts of cash management—or as some call it—working capital management—so that it uses other people's money to run and grow. In this program, we study Dell's success at managing working capital and cash. We consider cash flow reporting and the statement of cash flows. We look at what the standards require as well as how to customize a cash flow statement for management's use. Generating useful information for management includes projecting cash flows—so we will look at how to create a meaningful cash flow projection. We will also analyze several example cash flow statements and discuss common cash flow metrics, including IRR. Finally, what can you do with all that extra cash? We will discuss investment policies and banking relationships to help keep your money safe and working for you.
Use of Materials
Audio or DVD
The user should begin by watching the DVD segment or listening to the audio CD for the chapter before reading the text. The user may wish to make notes of the most important concepts and any terms that are new. Next, the user should review the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. It may be helpful to highlight important material and/or to make additional notes. Next, the user should complete the study questions at the end of the chapter and review the answers. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished watching the DVD or listening to the audio CDs and reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text or DVD or audio CDs that were difficult. When the user is ready, s/he should complete the quizzer. Reviewing notes periodically will increase retention of the material.
Online
The user should begin by watching the streamed video segment, if any, or listening to the streamed audio segment, if any, for the chapter before reading the text. The user may wish to make notes of the most important concepts and any terms that are new. Next, the user should review the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. After the user has studied each chapter, s/he should click on the link at the left to complete the interactive study questions. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished watching the streamed video, if any, or listening to the streamed audio, if any, and reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text or video/audio, if any, that were difficult. When the user is ready, s/he should click on the link to the left to complete the quizzer. The user's CPE certificate will be provided immediately upon successful completion of the quizzer.
Software
The user should begin by reviewing the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. As the user studies each chapter, s/he should complete the interactive study questions that appear in the lower panel of the screen. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text that were difficult. When the user is ready, s/he should click on the link at the far left to complete the quizzer. The user should email her/his quizzer statistics using the quizzer submission link in the software and the user's CPE certificate will be mailed to her/him.
This program is divided into eight (8) chapters and a glossary appendix.
Chapter 1 discusses the pros and cons of the three main ways to get cash in your business. A few tips for stemming the cash outflow are also covered.
Chapter 2 is about the "Four Principles of Happy Cash Flow." Use these principles to diagnose your business and the business of others. We also discuss an alternative definition of working capital in this chapter.
Chapter 3 takes a look at a variety of companies and their skill at implementing the four principles of happy cash flow. We also run through an exercise that shows how changing working capital balances can free up enormous amounts of cash.
Chapter 4 is full of ideas on how to move inventory, payables, and receivables to desirable levels.
Chapter 5 talks about the what, why, and how of cash flow projections.
Chapter 6 talks about the format and contents of a cash flow statement and the direct and indirect method of presentation.
Chapter 7 points out the key themes and stories of the cash flow statement and how to read and interpret a cash flow statement.
Chapter 8 covers common cash flow metrics and contrasts two competitor's cash results.
The Appendix includes a glossary of terms.
Helpful Guidance
Throughout this program, the user will find explanations and discussions regarding some of the issues that often face practitioners. In order to enhance the user's comprehension of the material and highlight important practical considerations, this program includes the following designations:
A Biskalert is intended to warn the practitioner of a particular situation that may require action or other consideration by the client or the practitioner on behalf of the client.
A Biskpoint presents analysis or commentary that attempts to explain or clarify authoritative guidance.
A Bisktip provides practical advice that may be used to help improve client service or service to the practitioner's organization.