Having a clear understanding of how cash is being received and spent, and to understand overall cash flow management is vital to mitigate any cash flow problems before they arise and damage the business. Particularly for international businesses, it can be a useful metric to help rethink costs, understand multi-currency effects of supplier payments, make investments or obtain a loan.
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It’s a crucial metric, used when reviewing and monitoring a business’ financial performance and determining the next steps in growth. ²Ĭash flow is crucial for a business for many different reasons.īusinesses are required to report a cash flow statement as part of their financial documents.³ The basic definition of cash flow refers to the amount of money that is coming in and out of the business. What is cash flow, and why is it important
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