Balance sheet

"a statement of the financial position of an enterprise as at a given date, which exhibits assets, liabilities and capital.

Benefits of having a Balance Sheet

It allows companies to improve financial performance, without boosting sales or lowering cost. Balance sheet management make business more efficient at converting input into output and resulted in cash. It can speed up the cash conversion cycle.

Why CFO And Separate Finance department ???

Understanding working capital

Definition of 'Working Capital' A measure of both a company's efficiency and its short-term financial health.
Working capital = current assets current liabilities

Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its shortterm liabilities with its current assets (cash, accounts receivable and inventory).

PRODUCTION CYCLE OF A MANUFACTURING CONCERN.

The Elements of Working Capital

Major elements Stocks Receivables Cash (in hand and at bank) Major element Trade creditors

Working capital

Current assets

Current liabilities

equals

less

Why do we need to Manage Working Capital?

A shortage of Working Capital may lead to operating difficulties - shortage of stock, inability to offer credit to clients, slow payment to creditors, missed opportunities An excess of Working Capital also represents money locked up in stocks and debtors investment may not produce an appropriate return Working capital, therefore, needs careful management

Relationship with banker

Share the true picture of financial position of the company. Discuss the planning . Repayment of loan. Submission of budget report to bank. Transparency in flow of transactions.

Analyzing the account receivables.

Analysis of debtors behavior. It will represent the firms debt collection Period .