Cash is King

Cash is King! If there is an incontestable truth both in business and in life is this.
Cash is more than merely a unit measure, being what allows survival and independence.  Cash gives freedom, room for committing errors and time for making choices.
For a startup it represents the oxygen that allows it to develop products and acquire customers. For a company already established it allows – gives time – it make adjustments in its infrastructure or to its business models. For an individual it means the possibility of going through a period of unemployment, a sabbatical or a career or professional change.


Cash is the availability of money. In an ampler definition it represents the availability of money and investments that may be easily and quickly converted into money (i.e.: investments in the financial and capital markets). It may include, yet, expanding the concept a bit, income generated by non-liquid assets (i.e. rent).


Cash results from the profit produced by the business, adjusted by working capital variances (terms of accounts payables and receivables and expenses) deducting capital expenditures, dividends and amortization of loans and adding capital contributions (money received from shareholders) and received loans (money received from financial institutions or other third parties).


EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) or LAJIDA (Lucro Antes dos Juros, Impostos, Depreciação e Amortização), in Portuguese, is not cash generation. It is, a measure that allows the evaluation of the business operational performance and, yet, compare it to other different companies as it does not consider: a) how the company is financed and to which cost (financial expenses); b) the volume of investments (installed capacity; infrastructure) necessary to generate income (depreciation expense that results from the invested value divided by its useful life), c) taxes particularities (situation); and, yet, d) working capital variance (terms of payments and collection).
If Cash is king, being for a company or and individual, most important would be to manage it by having clarity on the inflows and outflows, their origins and their terms of collection and payments. Thus, a good cash flow system that allows registering commitments, rights, cash position, estimates, and, yet, predictability is fundamental.


It was with this certainty and in view of a practical need when in a project involving a startup that we developed a managerial application of Cash Flow (FC). This application was based on experience and it carries embedded concept and, at the same time, flexibility. A differential of this application to others is the possibility of making entries of accounts receivable, accounts payable, and provisions (estimates) and, as a result, having the possibility of extracting a report of Cash Flow Forecast. According to an early user, an interior designer and founder of a furniture and decor ecommerce, she says: “What I like the most about the Cash Flow app is that it allows me to anticipate my needs of cash. It gives me assurance and time that allows me anticipating the necessary measures. I have liked it so much that I will use it for my home!”


We are extending to all our readers the possibility of experiment, for a 30 day period, without any cost, the application. In order to do that, just register (and we will not ask for any credit card information) and use. Just visit the following address: http://www.2bpartnersconsulting.com/site/index.php/br/ferramentas-gerenciais  and click on the highlighted button and will be transferred to the registration page.