Financial performance indicators of the enterprise

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The organization of any business requires certain financial investments, which are ultimately aimed at generating profit. Accounting reports consider such resources as assets. If not all funds are the personal property of the business owner, then the existing credit obligations are subtracted from the total amount.

In terms of this indicator of the effectiveness of the financial activity of the enterprise, its work is assessed quite simply. If everything functions well, then the amount of capital increases over time, thanks to incoming income. In the case of a zero or, even worse, negative result, it is necessary to take measures to maintain the independence of the company, as well as to pay off existing debts on loans without taking out new loans.

Cash flow forecast

Business is an ongoing process, with cameroon email list income and expenses constantly being generated. The company must settle accounts with suppliers of raw materials and employees, pay taxes, and customers pay for supplies (either by advance payments or upon expiration of the deferment period).

The total flow of incoming cash for a certain period is called "cash flow". There is also the concept of "cash outflow", which means the totality of all payments. These two phenomena form the basis of the forecast, which determines the difference between two amounts - how much money the company should receive and how much it should pay.

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In this case, when analyzing the performance indicators of the enterprise's business activities using formulas, it is necessary to distinguish between the concepts of financial flow and profit. In the first case, we mean a set of income and expenses that the enterprise had in the reporting period. In the second case, we are talking about accounting that combines all income from sales, as well as expense items reflected in the reports for a specific month, even if in fact the basis for their formation arose at an earlier date.

For organizations working with contractors by providing a deferment, it is quite possible for a significant gap to form. That is, a situation may arise when there is potential profit, but it has not yet arrived at the enterprise, so a deficit of cash is formed at the moment. This problem is quite serious and can only be prevented by competently making forecasts.