Purpose and objectives of cash flow management

Topic 8. Cash flow management of the organization

The implementation of all types of financial and business operations of the organization is accompanied by the movement of funds - their receipt or expenditure. This continuous process is defined by the concept cash flow.

Cash flow- a set of time-distributed cash inflows and outflows.

Management Goal cash flows - Ensuring the financial balance of the organization in the process of its development by balancing the volume of receipts and expenditures of funds and their synchronization in time.

Tasks of cash flow management:

formation of a sufficient amount of funds of the organization in accordance with the needs of its economic activity;

optimization of the distribution of the volume of generated financial resources of the organization in the areas of economic activity;

Ensuring a high level of financial stability and solvency of the organization;

· maximizing the growth of net cash flow, ensuring the specified pace of development of the organization;

· minimization of losses in the value of funds in the process of their economic use.

There are the following types of cash flows.

· By type of activity allocate cash flows from current (operating), financial and investment activities.

· Direction of cash flow allocate positive cash flow, characterizing the totality of cash receipts and negative cash flow, characterizing the totality of payments.

· By calculation method allocate gross cash flow, representing the totality of receipts and expenditures of funds and net cash flow, representing the difference between positive and negative cash flows.

· According to the degree of continuity single out regular ones, i.e. providing for equal intervals between payments and irregular (discrete).

· By volume sufficiency allocate excess cash flow, representing the excess of cash inflows over their outflows and deficit cash flow, in which cash receipts are lower than the organization's needs for spending them.

The organization's cash flows in all forms and types, and, accordingly, the total cash flow are the most important independent object of financial management.

The system of key indicators characterizing the cash flow includes:

the volume of cash receipts;

the amount of money spent;

the volume of net cash flow;

the amount of cash balances at the beginning and end of the period under review;

check amount of funds;

· Distribution of the total amount of cash flows of certain types for certain intervals of the period under review. The number and duration of such intervals are determined by the specific tasks of analyzing or planning cash flows;

· assessment of factors of internal and external nature, influencing the formation of cash flows of the organization.

Cash flow is carried out in three types of activities:

current (main, operational) activity;

· investment activities;

· financial activities.

Current (main, operating) activities- the activities of the organization, pursuing the extraction of profit as the main goal, or not having the extraction of profit as such in accordance with the subject and objectives of the activity, i.e. the production of industrial, agricultural products, the performance of construction work, the sale of goods, the provision of public catering services, harvesting agricultural products, leasing property, etc.

Inflows from current activities:

receipt of proceeds from the sale of products (works, services);

Receipts from the resale of goods received by barter;

Receipts from the repayment of receivables;

advances received from buyers and customers.

Outflows from current activities:

payment for purchased goods, works, services;

Issuance of advances for the purchase of goods, works, services;

payment of accounts payable for goods, works, services;

· salary;

payment of dividends, interest;

· payment according to calculations on taxes and fees.

Investment activities- activities of the organization related to the acquisition of land, buildings, other real estate, equipment, intangible assets and other non-current assets, as well as their sale; with the implementation of own construction, expenses for research, development and technological development; with financial investments.

Inflows from investment activities:

receipt of proceeds from the sale of non-current assets;

receipt of proceeds from the sale of securities and other financial investments;

income from the repayment of loans granted to other organizations;

receiving dividends and interest.

Outflows from investment activities:

payment for acquired non-current assets;

payment of acquired financial investments;

· issuance of advances for the acquisition of non-current assets and financial investments;

granting loans to other organizations;

· Contributions to authorized (share) capitals of other organizations.

Financial activities- the activity of the organization, as a result of which the value and composition of the organization's own capital, borrowed funds change.

Cash inflows from financing activities:

Receipt from the issue of equity securities;

income from loans and credits provided by other organizations.

Outflows from financial activities:

repayment of loans and credits;

Repayment of financial lease obligations.

The cash flows generated by the current activities of the organization often go into the sphere of investment activities, where they can be used to develop production. However, they can also be directed to the sphere of financial activity for the payment of dividends to shareholders. Current activities are quite often supported by financial and investment activities, which ensures additional capital inflow and the organization's survival in a crisis situation. In this case, the organization ceases to finance capital investments and suspends the payment of dividends to shareholders.

The cash flow from current activities is characterized by the following features:

current activity is the main component of all economic activity of the organization, therefore, the cash flow generated by it should occupy the largest share in the total cash flow of the organization;

forms and methods of current activities depend on industry characteristics, therefore, in different organizations, cash flow cycles of current activities can vary significantly;

· Operations that determine the current activity are distinguished, as a rule, by regularity, which makes the monetary cycle quite clear;

· Current activity is focused mainly on the commodity market, so its cash flow is related to the state of the commodity market and its individual segments. For example, a shortage of inventories in the market can increase the outflow of money, and overstocking of finished products can reduce their inflow;

current activities, and hence its cash flow, are inherent in operational risks that can disrupt the cash cycle.

Fixed assets are not included in the cash flow cycle of current activities, since they are part of investing activities, but it is impossible to exclude them from the cash flow cycle. This is explained by the fact that current activities, as a rule, cannot exist without fixed assets, and in addition, part of the costs of investment activities is reimbursed through current activities through depreciation of fixed assets.

Thus, the current and investment activities of the organization are closely related. The cash flow cycle from investing activities is the period of time during which cash invested in non-current assets will return to the organization in the form of accumulated depreciation, interest or proceeds from the sale of these assets.

The cash flow from investing activities is characterized by the following features:

· the investment activity of the organization is subordinate in relation to the current activities, so the inflow and outflow of funds from investment activities should be determined by the pace of development of current activities;

Forms and methods of investment activity are much less dependent on the industry characteristics of the organization than current activities, therefore, in different organizations, the cycles of cash flows of investment activities are usually almost identical;

· the inflow of funds from investment activities in time is usually significantly distant from the outflow, i.e. the cycle is characterized by a long time lag;

investment activity has various forms (acquisition, construction, long-term financial investments, etc.) and different directions of cash flow in certain periods of time (as a rule, initially outflow prevails, significantly exceeding inflow, and then vice versa), which makes it difficult to represent its cash flow cycle flow in a fairly clear pattern;

· investment activity is associated with both commodity and financial markets, the fluctuations of which often do not coincide and can affect the investment cash flow in different ways. For example, an increase in demand in the commodity market may give the organization an additional cash inflow from the sale of fixed assets, but this, as a rule, will lead to a decrease in financial resources in the financial market, which is accompanied by an increase in their value (percentage), which, in turn, may lead to an increase in the cash outflow of the organization;

· the cash flow of investment activities is affected by specific types of risks inherent in investment activities, united by the concept of investment risks, which are more likely to occur than operational ones.

The cash flow cycle of financial activity is the period of time during which money invested in profitable objects will be returned to the organization with interest.

The cash flow from financing activities is characterized by the following features:

financial activity is subordinate in relation to the current and investment activities, therefore, the cash flow of financial activities should not be formed to the detriment of the current and investment activities of the organization;

the volume of cash flow of financial activities should depend on the availability of temporarily free cash, so the cash flow of financial activities may not exist for every organization and not constantly;

financial activity is directly related to the financial market and depends on its state. A developed and stable financial market can stimulate the financial activity of the organization, therefore, provide an increase in the cash flow of this activity, and vice versa;

· financial activities are characterized by specific types of risks, defined as financial risks, which are characterized by a special danger, therefore, they can significantly affect the cash flow.

The cash flows of the organization are closely related to all three types of its activities. Money constantly "flows" from one activity to another. The cash flow of current activities, as a rule, should fuel investment and financing activities. If there is a reverse direction of cash flows, then this indicates an unfavorable financial situation of the organization.

Cash flows are a set of time-distributed receipts and payments of funds generated in the course of its business activities. To be able to rationally direct these flows in the right direction is a quality that a competent head of an organization must possess in order to increase the profitability of a business. We offer formulas for calculating cash flows and methods for their effective optimization.

You will learn:

• What is the cash flow of the enterprise.
• Why manage the cash flow of the enterprise.
• What are the types of business cash flows.
• What is cash flow analysis.
• How to analyze the cash flows of an enterprise.
• What is a cash flow statement and how is it prepared?
• What factors affect cash flows.
• How to predict the cash flows of a company.
• What types of cash flow budgets exist.

Classification and types of cash flows of the enterprise

The very concept of "cash flow" is collective and includes many different financial flows that ensure the continuous conduct of business processes. For optimal management of all flows in the enterprise, they are divided into separate groups depending on their inherent characteristics.

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1. By type of economic activity in accordance with international accounting standards:

• For operating (core) activities - DP (OD).

The expenditure part includes settlements with suppliers and contractors for goods and services, payments to employees, payments to the budget and extra-budgetary funds, as well as other expenses related to the main activities of the enterprise. Revenues include transfers of funds from buyers of goods, reimbursement or refund of overpaid tax payments, etc.

• For investment activities - DP (ID).

Transfers and expenses of finance in the course of investment operations: income from the disposal of fixed assets and intangible assets, changes made to long-term instruments of the investment portfolio, and other financial flows associated with the investment activities of the enterprise.

• For financial activities - DP (FD).

Payments and cash receipts related to the attraction of share and equity capital, loans and credits of various maturity, payment of dividends and income on deposits to the company's owners and other external cash flows of the enterprise.

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2. According to the direction of cash flow of the company:

• Positive - RAP.

Cash inflow, that is, the sum of all transfers received from the economic activity of the enterprise to its current account.

• Negative - ODP.

Cash outflow is the total cost of financial resources incurred as a result of the business activities of the enterprise.

3. According to the volume calculation method:

• Gross - VDP.

This is a set of income and expenses of the enterprise in a certain period for each of the time intervals.

• Net - CDP.

This is the difference arising from the receipts and expenditures of funds, also in a specific period and over time intervals. It is this indicator that determines the result of the organization's activities and its financial balance.

4. According to the level of volume sufficiency:

• Excess - IZDP.

A situation where the receipts of financial flows are significantly higher than the actual needs of the company in the costs incurred. A characteristic feature is a large positive indicator of net cash flow, which is not used in the operating activities of the enterprise.

• Deficient - DFDP.

The opposite is the situation in which the volume of expenses significantly predominate over the level of income. Moreover, even if the net cash flow has a plus sign, but cannot cover all the planned expenses of the organization, the financial flow can be defined as a deficit. If the net cash flow indicator has a minus sign, this clearly defines it as a deficit.

5. According to the method of evaluation over time:

• The real one is NDP.

This is the financial flow of the enterprise, which is planned to be received in the future, reduced by value to the real time.

• Future - BJP.

This is the cash flow of the enterprise, value-adjusted to a certain point in the future. It is the basis for calculating the real value of goods and determines the nominal value of the cash flow at a specific moment in the future or in a certain time interval.

6. According to the continuity of formation in the period under review:

• Regular - RDP.

It is defined as a cash flow associated with the receipt or expenditure of funds as a result of specific operations that are carried out regularly in a specified time period at clear interval intervals. Such flows include most of the financial transactions at the enterprise: servicing loans, implementing long-term investment projects, etc. Thus, the bulk of the company's cash flows within its life cycle can be characterized as regular.

• Discrete - DDP.

Shows financial income and expenses for one-time business transactions for a certain period of time. This indicator can be used, for example, in the case of a single purchase of any real estate, industrial complex, franchise license, as well as receiving assistance on a gratuitous basis. In the case of considering the cash flows of the enterprise within the minimum period of time, any of them can be defined as discrete.

7. By the scale of servicing the economic process:

• The cash flow of the firm as a whole is the DFT.

The most generalized type of financial flow, which includes all the others related to the economic activity of the enterprise.

• For individual structural divisions - DPCO.

The distribution of the financial flow among various divisions of the company, which can be defined as separate objects in the integral structure of the economic and organizational structure of the enterprise (the so-called responsibility centers).

• For individual business transactions - DPHO.

In the general structure of the business process in the enterprise, this is the initial object of independent management.

8. According to the stability of time intervals of formation:

• cash flows with uneven time intervals within a certain period. As an example, we can cite the procedure for paying lease payments when, by agreement of the parties under the contract, they are made during the entire period of its validity at various time intervals;
• financial flows with uniform time intervals within a certain period, which can be characterized as annuity.

It is from the quality of management of various cash flows that the overall financial condition of the company depends.

Factors that determine the important role of effective cash flow management in an organization

1. The financial stability of the organization in the process of business development, as well as its pace, depends on the rational management of cash flows, on their correspondence with each other in time and in volume.
2. A clear organization of cash flows shows the level of "financial health" of the company and helps to achieve a high rate of profitability and profitability of all business processes, since cash flows are used in each of them.
3. Effective management of financial flows makes it possible to reduce the share of credit or other borrowed funds, while optimizing the use of internal resources of the enterprise as much as possible and reducing the dependence of the business development rate on external sources of financing.
4. Violations in the movement of payments negatively affect the volume of sales of goods, labor productivity indicators, the creation of material and raw material reserves, etc., therefore, the effective direction of cash flows affects the improvement of the rhythm of the entire operational process.
5. Active cash flow management has a positive impact on profits. Thus, temporarily free financial reserves that are part of working capital, as well as attracted (investment) resources, can be effectively used with a competent approach.
6. Rational cash flow management at the enterprise directly affects the rate of capital use: the faster the turnover, the greater the profit.
7. Efficient cash flow management allows you to correlate the receipt and expenditure of funds and thereby reduce or completely eliminate the risk of insolvency of the enterprise.
8. In general, the cash flow at the enterprise can be represented as a system of "financial blood circulation". Thus, if you effectively organize its work, you will have the opportunity to achieve high business profitability.

Calculation of enterprise cash flows and optimization methods

If the cash flows at the enterprise will be scarce, then this may affect the decrease in the level of liquidity and solvency of the organization, an increase in volumes in front of counterparties, which will eventually lead to a low profitability of the company's assets and own funds.

There are also adverse consequences when excess cash flows occur. This is the failure to receive a possible income from temporarily free cash (for example, they can be invested for a short time), and inflationary losses of unused cash flows. The result is the same - low profitability.

An increase in the future volume of cash receipts can be achieved in the following ways:

• additional issue of shares;
• increase in own capital by attracting investors;
• partial or full realization of financial investment instruments;
• sale or lease of unused real estate of the enterprise and other fixed assets;
• attracting long-term loans.

To reduce expenditure items in strategic planning, it is necessary to:

• reduce or completely eliminate investment;
• reduce the volume and number of existing investment projects;
• reduce the operating costs of the organization.

For more efficient use of cash flows in the presence of an excess, it is recommended, on the contrary, to expand investment activities. For these purposes, you can:

• accelerate the development and implementation of real investment programs;
• increase the expanded reproduction of current non-current assets;
• form an investment portfolio as quickly as possible;
• partially or fully repay the loan debt ahead of schedule;
• divide the activities of the enterprise by regions.

At the same time, special attention should be paid to the balance of positive and negative cash flows over time.

Financial flows can be divided according to the level of predictability: completely and insufficiently predictable cash flows are distinguished. There are also absolutely unpredictable flows, but it makes no sense to study them as part of optimization.

Predictable cash flows that can change over time are optimized most effectively. For these purposes, synchronization and alignment methods are used.

Synchronization of cash flows is based on the interdependence between positive and negative financial flows. To implement synchronization, it is necessary to increase the level of correlation between both categories of cash flows. Its result is determined using the appropriate coefficient, the value of which should tend to "+1".

QC DP (cash flow correlation coefficient) is determined by the following formula:

Р p.o - possible probabilities of deviation of cash flows from their average value in the planning period;

RAP i- options for the amount of positive cash flow in certain time intervals of the planning period;

RAP - the average amount of positive cash flow in one time period of the planning period;

ODP i- Variants of amounts of negative cash flow in certain time intervals of the planning period;

ODP - the average amount of negative cash flow in one time period of the planning period;

δ RDP, δ RDP - root mean square (standard) deviation of the amounts of positive and negative cash flows, respectively.

An important step in optimizing the financial flows of an enterprise is to maximize net cash flow. It is its increase that will ensure the acceleration of business growth at the expense of its own funds and reduce the dependence of its development level on external sources of financing, while increasing the market value of the company as a whole.

Movement and analysis of enterprise cash flows

Cash flow analysis is the determination of the values ​​of received and expended material resources. The main goal of this process is to analyze the financial stability and profitability of the organization. His first step is the calculation of cash flows from the main operating activities of the enterprise.

As a result of the analysis of financial flows, it is possible to identify the level of self-sufficiency of the organization, its economic potential, profitability, etc.

Economic sustainability of the organization for the most part depends on cash receipts, which should correspond as much as possible to the volume of existing liabilities. If the enterprise does not have the minimum required amount of cash flows, this may be a factor indicating the presence of financial problems. If the situation is reversed and cash is in excess, this may be a sign of unprofitable activities.

Such losses can be caused not only by the occurrence of lost profits in a situation where temporarily free cash is not invested in assets, but also by the depreciation of money and high inflation in the country. Thus, it is the analysis of cash flows that will help determine the economic condition of the business in reality.

When conducting a financial analysis of a company as a whole, the study of cash flows can be attributed to one of the most revealing moments, because it is precisely by analyzing these data that one can see how optimally financial management is organized at the enterprise in order to constantly have sufficient funds.

The main report for the analysis of financial flows is a cash flow statement, which, in accordance with the international standard IAS 7, is compiled in the context of the types of activities of the organization (financial, current, investment), and not depending on the sources of funds and their directions spending. Thus, it is this report that serves as the main source of data on cash flows in the enterprise.

The cash flow statement is formed in order to determine how the financial, investment and current activities of the enterprise affect the cash flow in a given time period, and at the same time makes it possible to determine the causes of changes in the movement of financial flows.

Such a report is a source of important information not only for business owners and leaders of the organization, but also for creditors and investors.

Financial managers use the cash flow statement to determine the level of liquidity of the enterprise, to calculate dividends, to analyze certain decisions made in order to implement investment projects.

In turn, creditors and investors study this report in order to determine the level of competence of the company's managers, who solve the problem of generating a sufficient amount of cash when accruing dividends and paying off credit debt.

The cash flow statement consists of sections that reflect information on the receipt and expenditure of money with their distribution to the financial, current and investment activities of the enterprise.

1. Current activities refers to business transactions that ultimately lead to profit. This may be the sale or purchase of goods, works, services that provide production processes, payment of earnings to employees, tax and other obligatory payments, deduction of interest for the use of borrowed and credit funds.

It is the current activity that is the main channel for making a profit, so it should also be the main source of cash flows.

2. Investment activity- these are operations for the purchase and sale of fixed assets and other intangible assets, securities, the provision of loans and credits, etc.

As part of this activity, positive cash flows include the sale of fixed assets and other assets, as well as the receipt of income from long-term investments. Negative cash flows include purchases of property, plant and equipment, long-term financial investments and other capital investments.

Temporary cash outflows can be attributed to normal business practices, because you should always strive to increase production and improve product quality.

3. Under financial activities understand the operations of receipt or return of funds from business owners. This also includes cash flows from the issuance of shares, obtaining loans and credits (both short-term and long-term), other targeted financing, and as an expense - the issuance of dividends, the return of credit debt of any urgency, the repayment of bills.

The formation of a report on the movement of material resources involves the identification of cash flows from:

• current activities of the enterprise;
• its investment activities;
• financial activities of the organization.

This report uses the information shown in the balance sheet and income statement, and the latter must be appropriately converted to determine cash flows. As adjustments, the amount of income is determined only on the basis of actually received funds, and expenses - only on the amount of real payments.

You can apply direct and indirect methods of adjusting the income statement:

• When using the direct method (Cash Flow), each individual report item is converted, as a result of which it becomes possible to identify actual data on the receipt and expenditure of funds.
• To apply the indirect method, it is not necessary to convert each item, but it is necessary to start the adjustment from the profit or loss indicator for the reporting period of interest. Further, this figure increases by the amount of expenses not related to cash flows (for example, depreciation), and decreases by the amount of similar income.

Prior to the formation of the cash flow statement, it is necessary to determine which balance sheet items were the main sources of cash receipts and expenditures (at least during the last two reporting periods). This can be done using a special table that identifies the sources of cash flows in the enterprise, as well as the direction of their consumption.

Factors affecting the cash flow of an enterprise

The reasons that affect the financial flows of the organization are divided into internal and external.

Internal factors are, first of all, the level of development at which the organization is currently located, the seasonality of the production and sale of products, the duration of the production and operating cycles, the urgency of investment projects, the company's depreciation strategy, the level of professionalism of top managers.

External factors - the applicable taxation system, financial and commodity market conditions, the principles used for settlements, the methods of crediting counterparties used (rules of business), the possibility of attracting external financing.

The cash flow management system is based on the basic principles:

• planning and control;
• transparency and reliability of information;
• efficiency and rationality;
• liquidity and solvency.

The main principle of cash flow management is the availability of up-to-date and accurate accounting data, the source of which is management and accounting. Such information may include accounts payable and accounts receivable, funds in the organization's cash desk and on current accounts, the procedure for repayment and issuance of borrowed funds, as well as the payment of interest, the amount of tax and other obligatory payments, the funds necessary for future purchases on an advance payment, etc. d.

Such data is accumulated from several sources, therefore, it is necessary to ensure their correct reflection in the accounting, because the untimely entry of primary data or the entry of erroneous information can lead to consequences for the entire enterprise. However, each company, at its own discretion, decides in what form and at what time intervals this information is accumulated, and also determines the basic principles of workflow.

At the same time, the main goal in managing cash flows is to achieve an optimal balance in terms of their types, volumes, time periods and other fundamental parameters. To effectively solve such problems, it is necessary to introduce appropriate accounting, planning, control and analysis systems.

Estimation of cash flows of the enterprise and their management

In order to conduct a comprehensive analysis of the "financial health" of the organization, the assessment of cash flows and their strategic planning must be carried out without fail. This will determine the following:

• the main areas of spending money;
• volume and sources of financial receipts;
• the reasons for the difference between the amount of profit and the actual amount of cash;
• sufficiency of own funds of the organization for long-term investments.

To assess the actual movement of cash flows, the synchronism of the receipt and expenditure of financial resources, to identify the dependence of the volume of profit on the management of cash flows, it is necessary to conduct a qualitative complete analysis of all sources of their receipt and disposal.

There are the following basic principles of cash flow management:

• Increasing the rate of full turnover of all categories of inventories, eliminating the occurrence of shortages (may lead to a decrease in sales).
• Increasing sales volumes at the best prices. It should be noted that the components of the sale price are not only actual costs, but also depreciation costs.
• Repayment of accounts payable on time without prejudice to business processes in the future.
• Ensuring the timely and prompt return of receivables (at the same time, attention should be paid to the fact that excessive intrusiveness in this matter may lead to a decrease in sales in the future).

There are two main methods for calculating the amount of cash flow.

The direct method is based on the analysis of cash flows on the settlement accounts of the organization and makes it possible to:

• draw conclusions regarding the sufficiency of financial resources to pay off current liabilities;
• identify the main sources of cash flows and areas of their spending;
• determine the relationship between the level of sales and income received in the reporting period.

This method is used in operational management to control the formation of profits and analyze the sufficiency of financial resources to pay off current liabilities.

However, the direct method will not show the dependence of the profit received on changes in the volume of cash flows at the enterprise, while in comparison with other methods such an assessment will take quite a long time, and the information obtained will be less meaningful.

It is possible to assess all sources of income and directions for spending the organization's financial resources using the direct method according to the following table:

You should also pay attention to the fact that the total cash flow must correspond to the difference between the opening and closing balance of financial flows for the reporting period.

The indirect method is that the indicator of net profit is converted into the amount of cash. At the same time, this indicator is adjusted so that it is not affected by expenditure items that are not related to the outflow of finance, and income items that do not lead to their inflow.

The indirect method is based on the study of balance sheet items and data from the income statement and at the same time makes it possible to:

• determine the dependence of the volume of net profit on changes in the assets of the company in a given period of time;
• establish the relationship of various activities of the organization.

An important advantage of this method of calculating the amount of cash flow can be called the identification of the dependence of the final financial result of the activity on the working capital of the enterprise. For the purposes of long-term planning, the indirect method helps to determine the directions in which "stagnation" in the movement of cash flows is observed and to find the most optimal solution to the identified problems.

There are the following stages of generating a cash flow statement using the indirect method:

1. Determination of changes for each balance sheet item and identification of factors associated with an increase or decrease in volume.
2. Study of the F-2 report, systematization of sources by income and directions by expenditure of the organization's finances.
3. Accumulation of the information received in the report on the movement of funds.

It is possible to assess all sources of income and directions for spending the organization's financial resources using the indirect method according to the following table:

The use of this method makes it possible to identify the company's capabilities to form the main internal financial source - the cash flow from current and investment activities - as well as the factors influencing this process. At the same time, an additional advantage will be the low labor costs required to create a report, because most of the information is already available in other standard reporting forms.

Expert opinion

In practice, cash flow is often analyzed by the direct method.

Dmitry Ryabykh,

The cash flow budget can be presented in the form of a table that contains all the financial receipts and expenses of the organization. You can create such a table for any time interval.

There are direct and indirect ways to create such a report. In the first case, cash flows are divided into income and expense items (for example, sales proceeds, payment of salaries to employees, transfer of tax payments).

In the second case, current cash flows are calculated on the basis of net profit, adjusted for changes in working capital and depreciation.

In most situations, generating a report using the indirect method is easier, but it will not be very convenient to analyze such a report in the future. Based on this, the direct method is most often used to calculate cash flow.

Planning the company's cash flows and developing a payment calendar

The sources of cash receipts planned for the next year and the directions of their spending by months represent only the basis for managing cash flows, however, in order to effectively use finances every day, it is necessary to form the so-called "payment calendar".

The main purpose of creating such a document is to determine the exact dates for the receipts and expenditures of the enterprise's cash flows, based on which plans and tasks for the employees of the organization will be set.

When generating a payment calendar, the reporting form is divided into two parts:

1. Schedule of planned financial receipts.
2. Schedule of future expenses.

The standard breakdown of the expense schedule is daily, but it is also possible to form a payment schedule in other time intervals (by weeks, by quarters).

In order to effectively manage the cash flows of an enterprise, the following types of payment calendar are used:

1. As part of the current activities of the organization:

• receivables collection calendar - payments are included in it in such amounts and terms as specified in the relevant agreements. In the presence of overdue debts, it is recommended to include payments in the calendar upon their preliminary agreement by the parties under the contract;
• tax payment calendar - all amounts of taxes and other obligatory payments to the budget and extra-budgetary funds are indicated;
• payroll calendar - most often used in organizations in which wages are paid according to a multi-stage schedule and the staffing structure is quite complex;
• calendar of repayment of accounts payable - it contains only the section "schedule of payments on the loan", while the amounts and terms of payments are determined in accordance with the terms of loan agreements (loan agreements);
• sales calendar - consists of two sections:

Schedule of costs associated with the implementation (advertising, maintenance of the distribution network, etc.);

Schedule of receipt of payments on account of payment for the delivered goods (crediting of cash from the sale of products);

• calendar for the creation of inventories - is formed for departments that are engaged in the logistics of the enterprise. This includes costs for the purchase of materials, raw materials, components, storage and insurance of products, as well as logistics costs. It is allowed to include in such a calendar information on the repayment of accounts payable to counterparties;
• management costs calendar - costs for the purchase of stationery, software and consumables for office equipment, travel expenses, postal and other services. The total amount of costs under this article is preliminarily determined by the estimate, and the terms are agreed with the relevant management units.

2. As part of investment activities:

• a calendar for creating a long-term investment portfolio, consisting of the following sections:

Schedule of expenses for the purchase of long-term investment instruments;

Schedule of receipt of interest and dividends from investment investments;

• the real investment project calendar also consists of two sections:

Schedule of receipts of resources for investment with the allocation of each of the sources;

Capital cost schedule;

• the calendar for the implementation of individual investment programs consists of similar sections and is formed depending on the centers of responsibility.

3. As part of financial activities:

• share release calendar - is divided into two types: in the case when such a budget is prepared before the start of the sale of shares on the primary stock market, it contains only the section "payment schedule for preparing the issue of shares"; if the calendar is created during the process of selling securities, then it should consist of two parts: sections "schedule of payments to ensure the sale of shares" and "schedule of positive cash flows from the issuance of shares";
• bond issue calendar - is formed as the need arises in accordance with the principles used to create a share issue calendar;
• principal debt amortization calendar for loans - consists of a single section "principal amortization schedule". The indicators in such a calendar are divided for each loan agreement separately, according to the terms of which the amounts and terms of repayment of the debt are determined.

All of the above types of payment calendars can be supplemented depending on the direction of the organization and the intricacies of doing business. At present, the formation of various payment calendars is greatly simplified due to the possibility of using special software for this purpose.

Expert opinion

Use management reporting to budget cash flow

Dmitry Ryabykh,

General Director of Alt-Invest Group of Companies, Moscow

The most optimal way to form a budget with actual information is to use management reports for this purpose. At the same time, it will not be superfluous to also borrow information from accounting reports, because it is they that reflect the most recent data on the entire operating activity of the enterprise. Thus, before forming a cash flow budget, it is necessary to find out how much the information in this report should correspond to the data from the accounting reports. You can use the following rules for this:

1. The cash flow budget will not necessarily be as detailed as the financial statements, that is, this document will only be based on accounting data.
2. It is necessary to come to the correspondence of the final amounts in the budget with the turnover on the current account of the enterprise, while taking into account all the nuances and paying attention to the slightest inaccuracies, which in the future will help to effectively control the correctness of budget formation.
3. When analyzing information from financial statements, it is necessary, first of all, to highlight the economic meaning of operations, omitting unnecessary nuances (for example, not taking into account the subtleties of cost accounting when categorizing them into articles).

Expert opinion

When analyzing cash flows, consider the planning horizon

Dmitry Ryabykh,

General Director of Alt-Invest Group of Companies, Moscow

When budgeting, the planning horizon must be taken into account using the following principles:

• for long-term plans (for example, for 5 years), the payment schedule is drawn up approximately, taking into account the expected volume of turnover;
• for short-term plans (from several weeks to several months), the payment schedule is formed by the direct method, indicating clear amounts and terms for both income and expenses of the enterprise. To do this, it is necessary to describe in detail the payment schedule, as well as information on the shipment of products or the performance of work / the provision of services, within the framework of each individual contract;
• to draw up an annual plan, a mixed approach is most often used, in which some of the sections are planned using the direct method, and most of the payments are determined by the principle of turnover (indirect method).

Thus, the longer the planning period, the less specifics (data from financial or accounting reports) will be in the budget and the more indicative calculations.

Company executives are interested in the financial security and stability of the business, which is largely determined by the generated cash flow. Cash flow ("cash flow") is the sum of receipts and payments for a certain period of time, which is divided into separate intervals.

Cash flows serve to ensure the functioning of the company in virtually all aspects. To achieve the required business goals, to ensure stable growth, the financial manager needs to optimally organize cash flow management. For this purpose, it is convenient to classify cash flows into types.

Classification of cash flows into types

1. Direction of movement:

• Positive cash flow, the amount of cash receipts from all types of operations (sometimes use the term "cash inflow").
• Negative cash flow, the amount of cash payments for all types of its operations (sometimes use the term "cash outflow").

The relationship between these species is quite high. If, over a period of time, one of these types of flows is reduced, then this will most likely entail a reduction in the second type. Therefore, in financial management, these two types are considered as a complex object of management.

2. By management levels: CFD, projects, activities allows you to assess the bottlenecks of financial management and take timely measures:

• The overall cash flow of the company. This cash flow includes all other types and serves the business as a whole.
• Cash flow of individual structural divisions, centers of financial responsibility (CFD) of the enterprise.
• Cash flow for individual transactions. This is the primary object of self-management.

Figure 1. Types of cash flows on the example of the software product "WA: Financier": Consolidated statement of cash flows according to IFRS.

3. By type of activity:

• Cash flow for current activities. Includes proceeds from the sale of core activities, advances from customers, revenue from ancillary activities and repayment of debts to suppliers, wages, tax payments to the budget fund.
• Cash flow from investment activities. For example, it includes cash flow associated with the acquisition of property or the sale of long-term assets.
• Cash flow from financial activities. Includes receipts of loans and borrowings, interest repayments, dividend payments, etc.

Figure 2. Types of cash flows on the example of the software product "WA: Financier". Consolidated cash flow statement.

4. In relation to the company:

• internal cash flow. Cash flow within the company.
• external cash flow. Cash flow between a company and its counterparties.

5. Calculation method:

• Aggregate cash flow - the entire amount of cash receipts or payments for a period of time at intervals.
• Net cash flow (NFC) - the difference between positive and negative cash flow over a period of time by intervals. NPV is a significant result of a business that determines its market value and financial position.

The formula for calculating NPV both for the company as a whole and for individual CFDs is:

The amount of net cash flow for the period = The amount of positive cash flow (cash inflows) for the period - The amount of negative cash flow (cash outflows) for the period.

The NPV sum can be both positive and negative. This indicator affects the size of the company's cash assets.

6. According to the level of sufficiency:

• Excess cash flow. In this case, the receipts are much higher than the company's actual need for spending them. An indicator of redundancy is a high positive NPV value.
• Deficient cash flow. In this case, the receipts are significantly lower than the company's actual need for spending them. At the same time, the amount of NPV can be positive, but it does not provide all the needs of the company for spending money. A negative NPV automatically means a deficit.

7. In terms of balance:

• Balanced cash flow. It can be calculated both for the company as a whole, and for a separate CFD, a separate operation.

Balance formula between individual types of cash flows for the period:

Positive cash flow amount = Negative cash flow amount + Anticipated increase in cash reserve amount.

• Unbalanced cash flow. In this case, equality is not guaranteed. Unbalanced is both deficit and excess total cash flow.

8. By time period:

• Short term cash flow. The period from the beginning of cash receipts (or payments) to the end is no more than 1 year.
• Long term cash flow. The period from the beginning of cash receipts (or payments) to the end of more than 1 year.

Typically, these types of cash flows are used for individual operations of the company: short-term cash flow is usually associated with current and partly with financial activities, long-term cash flow is associated with investment and partly with financial activities (for example, long-term loans and borrowings).

9. By importance in the formation of financial performance:

• Priority cash flow - generates a high level of net cash flow (or net profit). For example, proceeds from the sale of goods.
• Secondary cash flow - in terms of its functional orientation or insignificant volume, it does not have a significant impact on the formation of financial results. For example, the issuance of cash under the report.

10. According to the method of evaluation over time:

• Current cash flow - a comparable amount, given at a cost to the current point in time.
• Future cash flow is a comparable amount, discounted in value to a specific future point in time.

Typically, this classification is used for discounting.

11. In accordance with international accounting standards, cash flows are also divided by types of economic activity:

• Cash flow from operating activities is characterized by payments to suppliers of raw materials and supplies; third-party performers of certain types of services that provide operational activities.
• The cash flow from investment activities is characterized by payments and receipts of funds that interact with the implementation of real and financial investment.
• Cash flow from financial activities is characterized by receipts and payments of funds that are associated with the attraction of equity or other capital, with the acquisition of long-term and short-term credit and loans.

Taking into account the above classification, various types of financial planning and cash flow management are organized. Thus, the classification of types of cash flows helps to carry out accounting, analysis and planning of cash flows in the company.

Cash flow management is one of the main activities of the company. Cash flow management includes the calculation of the time of circulation of funds (financial cycle), cash flow analysis, its forecasting, determining the optimal level of cash, budgeting cash, etc.

Cash flow management of any commercial organization is an important part of the overall management system of its financial activities.

Cash flow management allows you to solve various problems of financial management and is subordinate to its main goal.

The main goal of cash flow management is to ensure the financial balance of the enterprise in the process of its development by balancing the volume of receipts and expenditures of funds and their synchronization in time.

Cash flow management involves the analysis of these flows, cash flow accounting, development of a cash flow plan. In world practice, cash flows are referred to as "cash flow".

Enterprise cash flow management process

Cash flow management process The enterprise is based on certain principles, the main of which are:

1. The principle of informative reliability. Like every control system, cash flow management must be provided with the necessary information base. The source of information for the analysis of cash flows, first of all, is the cash flow statement (previously form 4 of the balance sheet), the balance sheet itself, the income statement and appendices to the balance sheet.

2. The principle of ensuring balance. Enterprise cash flow management deals with many types and varieties of enterprise cash flows. Their subordination to the common goals and objectives of management requires balancing the cash flows of the enterprise by types, volumes, time intervals and other essential characteristics. The implementation of this principle is connected with the optimization of the company's cash flows in the process of managing them.

3. The principle of ensuring efficiency. Cash flows are characterized by a significant unevenness in the receipt and expenditure of funds in the context of individual time intervals, which leads to the formation of volumes of temporarily free cash. In essence, these temporarily free cash balances are in the nature of non-productive assets (until they are used in the economic process), which lose their value over time, from inflation and for other reasons. The implementation of the principle of efficiency in the process of managing cash flows is to ensure their effective use by making financial investments of the enterprise.

4. The principle of providing liquidity. The high unevenness of certain types of cash flows generates a temporary shortage of funds, which adversely affects the level of its solvency. Therefore, in the process of managing cash flows, it is necessary to ensure a sufficient level of their liquidity throughout the entire period under review. The implementation of this principle is ensured by appropriate synchronization of positive and negative cash flows in the context of each time interval of the period under consideration.

Taking into account the considered principles, a specific process of managing the cash flows of an enterprise is organized.

Cash flow management system

If the object of management is the cash flows of the enterprise associated with the implementation of various economic and financial transactions, then the subject of management is the financial service, the composition and number of which depends on the size, structure of the enterprise, the number of operations, activities and other factors:

in small enterprises, the chief accountant often combines the functions of the head of the financial and planning departments;

in the middle ones, accounting, the department of financial planning and operational management stand out;

in large companies, the structure of the financial service is expanding significantly - under the general supervision of the financial director there are accounting departments, departments of financial planning and operational management, as well as an analytical department, a department of securities and currencies.

As for elements of the cash flow management system, then they should include financial methods and tools, regulatory, information and software:

• among the financial methods that have a direct impact on the organization, dynamics and structure of the enterprise's cash flows, one can distinguish a system of settlements with debtors and creditors; relationships with founders (shareholders), contractors, government agencies; lending; financing; fund formation; investment; insurance; taxation; factoring, etc.;
• financial instruments combine money, loans, taxes, forms of payment, investments, prices, bills of exchange and other stock market instruments, depreciation rates, dividends, deposits and other instruments, the composition of which is determined by the peculiarities of the organization of finance at the enterprise;
• legal support of the enterprise consists of a system of state laws and regulations, established norms and standards, the charter of an economic entity, internal orders and orders, and a contractual framework.

In modern conditions, a necessary condition for the success of a business is the timely receipt of information and prompt response to it, therefore an important element in managing the cash flows of an enterprise is intra-company reporting.

Thus, the cash flow management system at an enterprise is a set of methods, tools and specific techniques for a purposeful, continuous impact on the cash flow by the financial service of an enterprise in order to achieve the goal.

Enterprise cash flow planning

One of the stages of cash flow management is the planning stage. Cash flow planning helps the professional determine the sources of funds and evaluate their use, as well as identify the expected cash flows, and therefore the growth prospects of the organization and its future financial needs.

The main task of drawing up a cash flow plan is to check the reality of the sources of funds and the validity of expenses, the synchronism of their occurrence, to determine the possible need for borrowed funds. The cash flow plan can be drawn up in a direct or indirect way.

The need to divide cash flows into three types is explained by the role of each and their relationship. If the main activity is designed to provide the necessary funds for all three types and is the main source of profit, while investment and financial activities are designed to contribute to the development of the main activity and provide it with additional funds.

The cash flow plan is drawn up for various time intervals (year, quarter, month, decade), for the short term it is drawn up in the form of a payment calendar.

Payment schedule- this is a plan of production and financial activities, in which all sources of cash receipts and expenses for a certain period of time are calendar-related. It fully covers the cash flow of the enterprise; makes it possible to link receipts of funds and payments in cash and non-cash form; allows to ensure constant solvency and liquidity.

In the process of compiling a payment calendar, the following tasks are solved:

• organization of accounting for the temporary docking of cash receipts and future expenses of the organization;
• formation of an information base on the movement of cash inflows and outflows;
• daily accounting of changes in the information base;
• analysis of non-payments and organization of measures to eliminate their causes;
• calculation of the need for short-term financing;
• calculation of temporarily free funds of the organization;
• analysis of the financial market from the position of the most reliable and profitable placement of temporarily free funds.

The payment calendar is compiled on the basis of a real information base on cash flows, which includes: contracts with counterparties; acts of reconciliation of settlements with counterparties; invoices for products; invoices; bank documents on receipt of funds to accounts; money orders; product shipment schedules; payroll schedules; status of settlements with debtors and creditors; statutory deadlines for payments on financial obligations to the budget and extra-budgetary funds; internal orders.

To effectively draw up a payment calendar, it is necessary to control information about the balance of funds in bank accounts, funds spent, average balances per day, the state of the organization's marketable securities, planned receipts and payments for the coming period.

Balancing and synchronization of cash flows

The result of developing a cash flow plan can be both a deficit and an excess of cash. Therefore, at the final stage of cash flow management, they are optimized by balancing in volume and time, synchronizing their formation in time, and optimizing the cash balance on the current account.

Both deficit and excess cash flow have a negative impact on the activities of the enterprise. The negative consequences of a deficit cash flow are manifested in a decrease in the liquidity and solvency of an enterprise, an increase in overdue accounts payable to suppliers of raw materials and materials, an increase in the share of overdue debts on financial loans received, delays in paying wages, an increase in the duration of the financial cycle, and, ultimately, in a decrease in profitability of using own capital and assets of the enterprise.

The negative consequences of excess cash flow are manifested in the loss of the real value of temporarily unused funds from inflation, the loss of potential income from the unused part of monetary assets in the field of their short-term investment, which ultimately also negatively affects the level of return on assets and equity of the enterprise.

According to I. N. Yakovleva, the volume of scarce cash flow should be balanced by:

1. attracting additional equity or long-term debt capital;
2. improving work with current assets;
3. getting rid of non-core non-current assets;
4. reduction of the enterprise's investment program;
5. cost reduction.

The amount of excess cash flow should be balanced by:

1. increasing the investment activity of the enterprise;
2. expansion or diversification of activities;
3. early repayment of long-term loans.

In the process of optimizing cash flows over time, two main methods are used - leveling and synchronization. Equalization of cash flows is aimed at smoothing their volumes in the context of individual intervals of the period under consideration. This optimization method eliminates, to a certain extent, seasonal and cyclical differences in the formation of cash flows (both positive and negative), while simultaneously optimizing the average cash balances and increasing the level of liquidity. The results of this method of optimizing cash flows over time are evaluated using the standard deviation or coefficient of variation, which should decrease during the optimization process.

Synchronization of cash flows is based on the covariance of their positive and negative types. In the process of synchronization, an increase in the level of correlation between these two types of cash flows should be ensured. The results of this method of optimizing cash flows over time are evaluated using the correlation coefficient, which should tend to the value “+1” during the optimization process.

The tightness of the correlation increases due to the acceleration or deceleration of the payment turnover.

The payment turnover is accelerated due to the following measures:

1. increasing the amount of discounts to debtors;
2. shortening the period of commodity credit provided to buyers;
3. tightening credit policy on the issue of debt collection;
4. tightening the procedure for assessing the creditworthiness of debtors in order to reduce the percentage of insolvent buyers of the organization;
5. use of modern financial instruments, such as factoring, accounting of bills, forfeiting;
6. use of such types of short-term loans as overdraft and line of credit.

The slowdown in the payment turnover can be carried out due to:

1. increasing the term of trade credit provided by suppliers;
2. acquisition of long-term assets through leasing, as well as outsourcing of strategically less significant areas of the organization's activities;
3. converting short-term loans into long-term ones;
4. reduction of cash settlements with suppliers.

Calculation of the optimal cash balance

Cash as a type of current assets is characterized by some features:

1. routine - cash is used to pay off current financial obligations, so there is always a time gap between incoming and outgoing cash flows. As a result, the company is forced to constantly accumulate free cash on a bank account;
2. precaution - the activity of the enterprise is not strictly regulated, therefore, cash is necessary to cover unforeseen payments. For these purposes, it is advisable to create an insurance cash reserve;
3. speculative - funds are needed for speculative reasons, since there is always a small probability that an opportunity for profitable investment will suddenly appear.

However, cash itself is a non-profitable asset, so the main goal of the cash flow management policy is to maintain them at the minimum required level, sufficient for the effective financial and economic activities of the organization, including:

• timely payment of suppliers' invoices, allowing you to take advantage of the discounts they provide on the price of the goods;
• maintaining a constant creditworthiness;
• payment of unforeseen expenses arising in the course of economic activity of the enterprise.

As noted above, if there is a large amount of money on the current account, the enterprise has the costs of missed opportunities (refusal to participate in any investment project). With a minimum supply of cash, there are costs to replenish this stock, the so-called maintenance costs (sales expenses due to the purchase and sale of securities, or interest and other costs associated with raising a loan to replenish the balance of funds). Therefore, when solving the problem of optimizing the balance of money on the current account, it is advisable to take into account two mutually exclusive circumstances: maintaining current solvency and obtaining additional profit from investing free cash.

There are several basic methods for calculating the optimal cash balance: mathematical models of Baumol-Tobin, Miller-Orr, Stone, etc.

An important step in cash flow management is the analysis of coefficients calculated on the basis of cash flow indicators. Analysts have proposed quite a lot of coefficients that reveal the relationship of cash flows with balance sheet and income statement items and characterize the financial stability, solvency and profitability of companies. Many of these ratios are similar to those calculated using profit or revenue figures.

The efficiency of the enterprise depends entirely on the organization of the cash flow management system. This system is created to ensure the implementation of short-term and strategic plans of the enterprise, maintaining solvency and financial stability, more rational use of its assets and sources of financing, as well as minimizing the cost of financing business activities.

Main role in cash flow management is given to ensuring their balance in terms of types, volumes, time intervals and other essential characteristics.

The importance and importance of cash flow management in an enterprise can hardly be overestimated, since not only the stability of the enterprise in a specific period of time, but also the ability to further develop, achieve financial success in the long term depends on its quality and efficiency.

Literature:

1. Bertones M. Knight R. Cash flow management - St. Petersburg: Peter, 2004.
2. Bykova E.V. Indicators of cash flow in assessing the financial stability of the enterprise. // Finance. - №2, 2000.
3. Efimova O.V. How to analyze the financial position of the company. - M.: UNITI, .2005.
4. Kovalev V.V. Management of cash flows, profit and profitability: a training manual - M .: TK Welby, Publishing House Prospekt, 2007.
5. Romanovsky M.V., Vostroknutova A.I. Corporate finance: Textbook for universities - St. Petersburg: St. Petersburg, 2011.

The significance of this topic lies in the fact that we defined the finances of enterprises from the very beginning as cash funds and cash flows. Flows ensure the functioning of monetary funds. Without the cash flows that each cash fund has - authorized capital, accumulation and consumption fund, etc. - these funds would not be capable: they were not formed and were not used. Therefore, an important component of enterprise financial management is cash flow management. The success of managing the finances of an enterprise depends on the ability to distribute, use and replenish funds.

The importance of cash flow management also stems from the fact that they serve business processes. Therefore, cash flow management accelerates the turnover of capital, allows you to increase profits, thereby giving the enterprise financial stability and the rhythm of its functioning, and also allows you to reduce the need for borrowed capital and act on the principles of self-financing.

If the borrowed capital is involved in the conditions of a well-functioning cash flow management system, then it is used in the general direction of flow management with the greatest return and is returned to the creditor without complications for the enterprise. In a word, the state of cash flows as a kind of money circulation system reflects the financial "health" of the enterprise.

Cash flow management includes cash flow accounting, forecasting, cash flow analysis and regulation.

Cash flow - This is the continuous movement of funds representing their receipt (inflow) and expenditure (outflow). Such movement is distributed in time and volumes. Serving economic activity, it is generated by this activity.

The purpose of cash flow management is to ensure a balance (equilibrium) of receipts and expenditures of funds and maintaining their optimal balance.

Managing cash flows means solving the following tasks:

1. Establish sources of income and directions for spending money;

2. Investigate factors affecting cash flows (internal, external, direct, indirect, etc.);

3. Analyze the reasons for the lack or excess of funds and take measures to bring them into line;

4. Improve the mechanism of regulation and control of cash flows.

Synchronization of receipts and payments in terms of size and time allows you to reduce the reserve balance of funds, optimizing its size, and invest free cash, turning it into an additional source of profit.

Cash flows can be classified:

1. P about scale maintenance of business processes and, accordingly, subdivided into general cash flow, accumulating all types of cash flows of the enterprise as a whole, for certain types economic activity, by individual structural divisions(responsibility centers) of the enterprise, for individual business transactions;

2. P about typeseconomic activity allocate such types of cash flows:

- operating activities(current) - somehow, payments to suppliers of raw materials, wages, tax payments, etc., and receipts from buyers of products, tax refunds, etc.;

- for investment activities- investments in long-term assets (land plots, buildings, equipment, etc.), investments in the authorized capital of other organizations and subsidiaries and, accordingly, proceeds from the sale of long-term assets and income from investment investments;

- for financial activities- receipts related to the attraction of additional equity and share capital through the placement of new shares and bonds, the use of credit, etc., and the payment of dividends and interest, the redemption of own shares, the redemption of bonds and own bills, the return of loans and the payment of interest on them, etc.

Cash flow diagrams for these types of activities are presented in Appendix No. 1.

3. Pabout directions cash flows are positive cash flow (inflow, receipts) and negative cash flow (outflow, payments).

4. Pabout method of calculation allocate gross cash flow as a set of receipts or expenditures of funds in a certain period and clean cash flow is the difference between cash in and out.

Net cash flow reflects their ratio and is calculated by the formula:

- in short supply cash flow - income below the actual need for spending money. Even if the amount of net cash flow is positive, it can be characterized as scarce if the amount received does not meet the minimum need of the enterprise for cash.

The negative value of the amount of net cash flow automatically makes it scarce. In financial analysis, it is advisable to determine the degree of sufficiency not only for each type of activity separately, but also as a combination of all types of activity. In this case, the shortfall in cash flows from one type of activity is offset by a positive inflow from others.

6. By time estimation method allocate present (current) and future (discounted) cash flows reflecting the value of money over time. It is different due to the natural depreciation of money. For example, at the beginning of the 20th century, an expensive suit made of natural fabric cost $50 in the United States. And today such a suit costs about 3000. Therefore, the purpose of the discount is to reflect the decline in the purchasing power of money in the future.

7. By continuity of formation consider: regular, i.e. carried out constantly, including with a uniform and uneven time interval (in most cases, the cash flows of an enterprise are regular, and the time interval may be violated with a change in the economic situation) and discrete - as a one-time receipt or expenditure of funds (gratuitous assistance, acquisition of another enterprise, etc.).

8. IN depending on prices distinguish cash flows at current prices;cash flows at forecast prices and cash flows at deflated prices(reduced to the price level of a fixed moment).

9. By form of implementation are divided into cash and non-cash cash flows.

10. By sphere of circulation share to external and internal(between business units).

11. By predictability - on planned and arising spontaneously (due to some extraordinary events).

The continuity of cash flow generates the repeatability of cash flows, which means their cyclicality. During the cycle, the funds invested in assets are returned in the form of a result obtained during the operation of these assets (for example, proceeds from the sale of goods and services or interest on invested capital). The cash flow serving each type of activity of the enterprise has its own cycle - for current activities, for investment activities, for financial activities.

The current activity cycle (production-commercial cycle) will be the time period from the moment of investing funds in pre-production stocks (purchase of raw materials, materials, etc.) until they are received from the recipients of products and services (debtors). The investment activity cycle will be measured by the time parameters of investing funds in non-current assets until a return is received from them. Etc. To more accurately determine the cycles of cash flows, it is necessary to link them with the circulation of economic assets as the material basis of cash flows.

Then the turnover of capital elements will come into view: for current activities- stocks of raw materials and materials - from the moment they are received from the supplier to transfer to production, including the time spent in the warehouse of the enterprise; finished products - from the moment of completion of its creation to the moment of sale, including the time of its stay in the warehouse; receivables turnover time - from the moment of its sale to the receipt of funds for these products.

That is, the time of the financial cycle is calculated by the formula:

FC \u003d WHO + AIR - VOKZ,

where WHO is the time of inventory circulation;

AIR - the time of circulation of receivables;

VOKZ - the time of circulation of accounts payable.

In its turn:

WHO \u003d ZAP sr × 360 / Sp

AIR \u003d DZ sr × 360 / V

VOKZ \u003d KZ sr × 360 / Sp,

where ZAP cf - the average value of reserves;

DZ av and KZ av - average values ​​of receivables and payables;

Cn is the total cost of products sold;

B - proceeds from the sale of products or services.

Operating cycles allows you to ensure the balancing of cash flows in time, to find reserves for generating cash flows at all stages of the circulation of economic assets of the enterprise.

Cash flow cycles depend on a number of conditions, including:

Industry specifics of the enterprise (technological cycle);

Features of the market in which the enterprise sells its products and purchases what it needs for industrial consumption;

Economic conditions in the country (tax policy, inflation, interest rates, etc.);

The level of general manageability of the enterprise and the ongoing financial policy.

However, the immediate objective of cash flow management is to shorten the financial cycle. Naturally, it will be based on a reduction in the production cycle (from the moment of purchase of working capital and a reduction in the time of the production process until the shipment of finished products), a decrease in the time of turnover of receivables (from the moment the goods are shipped to the recipient until the funds are credited to the settlement account of the manufacturer ).

In practice, cash flows and their provision are much more complex than in a schematic representation. For example, inventories and fixed assets can act as a means of payment and take the form of money bypassing the production process.

A special element in the presented scheme is accounts payable. It does not apply to business assets. But varying it allows you to regulate the cycle of cash flows and serves as a short-term source of increasing the available cash from the enterprise.

The focus of regulation and management of cash flows is the ratio of receivables and payables. First of all, we must strive to reduce accounts receivable, provide debtors with credit for an acceptable period and prevent its delay. But at the same time, remember that the use of deferred payment and installment plans, which inevitably give rise to receivables, can increase sales volumes.

And this is a positive moment in the "build-up" of receivables. From creditors, it is necessary to seek a loan for a period exceeding the repayment period of receivables, and use the funds received with maximum efficiency. Otherwise, the company faces penalties for non-payment of accounts payable and the loss of counterparties, and even technical bankruptcy.

Ensuring the financial balance of the enterprise by balancing the volume of receipts and expenditures of funds and their synchronization in time is carried out through:

Regular construction of schemes of emerging cycles of cash flows;

Analysis of each component of individual cash flow cycles and its optimization;

Control and, if necessary, restructuring cash flow cycles.

The calculation of the feasibility of organizing cash flows and their effectiveness can be carried out by two methods - direct and indirect.

Direct method - provides data on gross and net cash flow in the reporting period. It reflects the entire volume of receipts and expenditures of funds for certain types of economic activity (current, investment, financial) and for the enterprise as a whole.

That is, the essence of the direct method is to characterize the inflow and outflow of funds for a certain period through the state of the cash balance at the beginning and end of this period, taking into account the amount of cash turnover. For this, accounting and reporting data are used that characterize all types of receipts and expenditures of funds.

This method has its advantages and disadvantages. The advantages are:

Providing operational information and the possibility of assessing the sufficiency of funds for payments on current obligations;

Ability to identify the main sources of positive flows and the direction of negative flows;

Opportunities to identify items with the highest positive and negative cash flow results;

Possibilities of monitoring and regulating the state of cash flows as a generalizing indicator of accounting registers (General Ledger, order journals and other documents);

Possibilities of forecasting the state of cash flows and solvency of the enterprise.

The disadvantage is the complexity in the absence of electronic information processing and errors in the reliability of the effectiveness of the organization of cash flows, since some lines in the financial statements are not broken down according to the classification of the types of activities of the enterprise (wage payments, social payments).

Therefore, from the point of view of identifying the reasons for the discrepancy between financial results and free cash balances, as well as the state of profitability of the enterprise from various types of activities, the indirect method is more preferable.

indirect method- provides calculation of net cash flow based on the use of net profit as a basic element received in the reporting period, then converted into an indicator of net cash flow. Such a calculation is carried out by type of economic activity and the enterprise as a whole. The indirect method allows you to determine the main financial source of increasing net cash flow according to the types of activities and to identify the dynamics of all factors influencing its formation.

The cash inflow is made up of net profit, depreciation charges, the amount of decrease in individual items of the balance sheet asset and the increase in accounts payable.

The formula for calculating net cash flow from operating activities is as follows:

where CFop - the amount of net cash flow of the enterprise on operating activities in the period under review;

state of emergency - the amount of net profit of the enterprise;

aos - the amount of depreciation of fixed assets;

Ana - the amount of depreciation of intangible assets;

DZ - decrease (increase) in the amount of accounts receivable;

W tm - decrease (increase) in the amount of stocks of inventory items that are part of current assets;

KZ - increase (decrease) in the amount of accounts payable;

R - increase (decrease) in the amount of the reserve and other insurance funds.

Theoretically cash flow for ordinary activities in normally functioning enterprises should exceed their outflow. This is due to the process of increasing the cost of capital in the course of production activities, since the value received will be greater than the initial entrepreneurial advance.

But in fact, there is a whole set of factors that determine the possible excess of outflow over inflow, including the timeliness of debtor settlements, price changes for finished products sold and purchased pre-production stocks (there may be so-called “scissors” not in favor of the enterprise), timeliness of bank settlements , servicing the transfers of debtors, changes in exchange rate differences used in the calculations of currencies for enterprises engaged in foreign economic activity, etc.

With the normal development of business, accounts payable and accounts receivable are approximately the same in size, financiers say. (see V.V. Kovalev Management of cash flows, profit and profitability. M., 2008, p. 20).

For investment activities the amount of net cash flow is determined as the difference between the amount of sale of certain types of non-current assets and the amount of their acquisition in the reporting period. The formula by which this indicator of investment activity is calculated is as follows:

where CFin - the amount of net cash flow of the enterprise for investment activities in the period under review;

Ros - the amount of disposal of retired fixed assets;

Rna - the amount of disposal of retired intangible assets;

Rdfi - the amount of the sale of long-term financial instruments of the enterprise's investment portfolio;

Rsa - the amount of re-sale of previously redeemed own shares of the enterprise;

Dp - the amount of dividends (interest) received by the enterprise on long-term financial instruments of the investment portfolio;

pos - the amount of acquired fixed assets;

D NKS - the amount of growth in unfinished capital construction;

Mon - the amount of acquisition of intangible assets;

PDF - the amount of acquisition of long-term financial instruments of the enterprise's investment portfolio;

Vsa - the amount of redeemed own shares of the enterprise.

For financial activities the amount of net cash flow is defined as the difference between the amount of financial resources attracted from external sources and the amount of the principal debt, as well as dividends (interest) paid to the owners of the enterprise. The formula for calculating this indicator for financial activity is as follows:

where CF f - the amount of net cash flow of the enterprise on financial activities in the period under review;

Psk - the amount of equity or share capital additionally attracted from external sources;

MPC - the amount of additional attracted long-term credits and loans;

pkk - the amount of additionally attracted short-term credits and loans;

BCF - the amount of funds received in the form of gratuitous targeted financing of the enterprise.

Vdk - the amount of payment (repayment) of the principal debt on long-term credits and loans;

Wcc - the amount of payment (repayment) of the principal debt on short-term credits and loans;

Doo - the amount of dividends (interest) paid to the owners of the enterprise (shareholders) on invested capital (shares, shares, etc.).

The amount of net cash flow for these types of activities represents its total size for the enterprise in the reporting period for all types of activities.

The advantage of the indirect method when used in operational management is that it allows you to establish a correspondence between the financial result and the use of own working capital. In the long term, the indirect method allows you to identify the most problematic areas of managing cash flows and business activities of the enterprise, i.e. the formation of immobilized (unused) funds.

But, perhaps, the most important advantage of this method is that cash flow management when using own, borrowed and borrowed funds is aimed at the final result of the enterprise - earning net income.

But this method is not without drawbacks. For there is no absolute unity of factors affecting both the state of cash flows and the state of profit. Thus, early disposal of non-current assets, including fixed assets, leads to a decrease in profit by the amount of their residual value. But this transaction does not cause cash flow. In addition, it is necessary to take into account the existing discrepancy in the time of expenditure and receipt of income and their reflection in the financial statements, and the actual cash flow for these operations.

For example, according to accounting data, an enterprise can be profitable, but at the same time experience certain difficulties in paying for urgent obligations. The point here is in the specifics of the reflection of information in the reporting, which is ahead of the real cash flow, because it depends on the method of calculation used. Information about the cash flow is formed on a cash basis and reflects the fact of their movement. The resulting profit is, firstly, a calculated indicator, and secondly, it can be determined before the receivables are repaid.

The liquidity ratio of the cash flow is also used, in which the main guideline is the dynamics of the balances of the enterprise's cash assets, the size of which ensures absolute solvency.

It is calculated by the formula:

where PDS - cash receipts;

DO - cash balance;

RDS - spending money.

If the size of the net cash flow is correlated with the amount of money spent, then we get an indicator - the cash flow efficiency ratio.

The efficiency of a positive cash flow can also be expressed in terms of the ratio of profit to the size of this flow. This profitability ratio is calculated from the positive cash flows of various activities.

The state of cash flows of the enterprise is significantly influenced by the types and forms of cash payments used. They affect the rate of cash flow. Thus, the use of cash settlement ensures the receipt of funds at the time of the transaction. Cashless payment involves the movement of payment documents through banks serving counterparties, which requires more time.

Even the implementation of non-cash payments in various forms (payment orders and claims, advances, checks, on the terms of acceptance and without it, letters of credit with all their varieties) has a significant impact on the speed of movement of money due to various labor costs in processing the data of payment documents and various transfer procedures. Money.

To manage current cash flows, a cash flow plan, a profit and loss plan, a budgeting system, a payment calendar, and a cash plan are used.