Optimization of the company's cash flow

This opposition led to the establishment of an array of jobs and resources, or "Table of funding". The role of this
financial document is to allow the control of financing of the firm conditions. In its most simplified form, the table of
funding is reduced to a differential review and is as follows in Table n°5, Composition of Funds:
2 - THE FLOW OF OPERATIONS.
FUNDS APPLIED
FUNDS RECEIVED
Increase the Assets’ Account Increase the Liabilities Account
Decrease the Liabilities Account Decrease the Assets’ Account
Table n°5: Composition of Funds
Financial flows of exploitation arise from the operating cycle, i.e., procurement transformation and flow operations.
These flows are grouped in the statements of income into two headings: the charges and income for the period
The accounting distinction between heritage and streams of exploitation should not lose sight of the close
relationship between these two types of movements. Indeed:
1. Flows generated by the operating cycle cause variation in current assets and liabilities positions in the short
term.
2. "Allocations to depreciations and Provisions" link also exploitation and heritage.
3. Finally, the operating result reached by the confrontation of flows of loads and products represents:
An increase of the heritage of the firm, if it is positive;
Either a loss of substance heritage, if it is negative.
General Accounting therefore allows a synthetic reconstruction of movements of economic flows and operation feed,
using the table of funding, and the statements of income. In these circumstances the 'table of changes in cash will be
as follows:
OUTFLOWS
INFLOWS
Increase of Assets’ Accounts Increase of Liabilities Account
Funding Table
Decrease of liabilities’ Accounts Decrease of assets’ Account
Income Account Charges Revenue
TABLE 6: Table of the INFLOWS’ changes Structure
Means in other terms, that is a simple approximation table of funding and the statements of income of the period
considered. To what extent this analysis in terms of accounting flow helps to explain variations registered at the level
of the cash position of the company.
B - ACCOUNTING FLOW AND CASH FLOW.
The table of changes in cash assimilated accounting flows to cash flows. This assimilation is based on a number of
implicit assumptions and faces a number of limitations.
1 - THE IMPLICIT ASSUMPTIONS OF ASSIMILATION OF ACCOUNTING FLOWS TO CASH FLOWS.
These assumptions are six in number:
1 - Any increase in assets (excluding cash) involves a disbursement.
2 - Any decrease in liabilities involves a disbursement.
Page 41 of 124