BUSMHR 2500 Lecture Notes - Lecture 19: Microsoft Powerpoint, Cash Flow, Making Money
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Busmhr 2500 - lecture 19 - managing growth and cash. Is loosely managed with few controls: has little assessment of performance, holds only a few people accountable when things fail if any, founders can become irresponsible as a result, founders becoming irresponsible can cause: Control systems: to prevent this, entrepreneurs should adopt controls in their business like tracking business performance. Profitably and cash flows: profitability and cash flows are two different things. Inventories cost money to maintain as they require: warehouse space, security, the prevention of the deterioration and obsolescence of inventory, costs regarding inventory management can add up quickly. Cash cycle: cash cycle: the amount of time that passes between cash outlays and inflows during a firm"s sales, cash cycle example: Inventory + avg. receivables processing period - avg. payables period: the shorter your cash conversion period is the less your expenditures will be, revenue is like oxygen for your business.