Understanding Financial Principles - A Key to Success in Business

You do not need to be a finance expert to manage cash flow from your business operations and investments; however, a basic knowledge in finance is important to running a successful business.

Follow these financial principles both in your business and investment endeavors, and over time you will see an increase in the value of your business and your overall net worth.

Cash Flow Management

Cash flows in (sources) and out (uses) of a business. Sources of cash include the sale of products and services and the collection of accounts receivables. Cash usages include payments for expenses, taxes, accounts payable, and loan payoffs.

Businesses strive to be cash flow positive, but you may see a fluctuation in your cash situation (not necessarily positive) when investing in future gains such as long-term growth.  Check out this Forbes article to learn more about the benefits of exchanging capital for growth.

A company needs to evaluate cash flow needs, particularly during down markets,...

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