Answer to Question #223634 in Economics for Atif

Question

Please provide the importance of cash flow

Answer 1

Reasonably organized cash flows of the enterprise ensure the alignment of the operating cycle, increased production, and increased sales. At the same time, each violation of payment discipline negatively affects the formation of production reserves of raw materials and materials, the degree of labor productivity, sales of finished products, the market position of the enterprise, and other factors. Even fairly profitable companies can become insolvent due to the imbalance in time of various cash flows.