Accounting / July 19, 2018 / Ariyah Lang
Cash flow from financing (CFF) activities is a category in a company’s cash flow statement that accounts for external activities that allow a firm to raise capital. In addition to raising capital, financing activities also include repaying investors, adding or changing loans, or issuing more stock. Cash flow from financing activities shows investors the company’s financial strength. A company that frequently turns to new debt or equity for cash, for example, could have problems if the capital markets become less liquid.
Turnover Rates. Your business’s historical turnover rates are the first step in forecasting your growing working capital needs. You need to analyze your actual income statement and balance sheet to find out the following information How many days of inventory do I keep on hand (called inventory turnover)? How many days do customers take to pay me (called accounts receivable turnover)? How many days do I take to pay my vendors (accounts payable turnover)?.
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