Business Finance: Profit, Cash Flow, and Working Capital

BUSINESS
FINANCE

Contents
EXECUTIVE SUMMARY.................................................................................................................................3
PART 1.........................................................................................................................................................3
(a) Profit and cash flow and their difference...........................................................................................3
(b) Meaning of accounting terms............................................................................................................5
(c) Changes in working capital affect cash flow.......................................................................................5
2. Manage financial results......................................................................................................................5
3. Analysis and recommendations...........................................................................................................6
PART 2.........................................................................................................................................................6
EXECUTIVE SUMMARY.................................................................................................................................6
1. Purpose of preparing budget...............................................................................................................6
(b) Alternative budget methods..............................................................................................................8
2. Application of different methods.........................................................................................................9
3. Traditional and alternatively budgetary system..................................................................................9
REFERENCES..............................................................................................................................................11

EXECUTIVE SUMMARY
Business finance denotes the procedure for managing savings of a business. It's vital part
of conducting a business. Success of an organisation depends upon what efficiently their
mangers manage sources of making money. This record relies on data amass in Mediterranean
Delights Ltd. Inside this idea of profit and cash flow are ascertained, how working-capital effect
on cash flow tasks and manners which aids managers for generating effective cash flow tasks
with the assistance of effective management of working capital are clarified.
PART 1
1.
(a) Profit and cash flow and their difference
Profit: The expression benefit specify as net price of fiscal advantage aeries by industry
companies throughout their operational tasks. It is part of each and every business organisation
weather it's financial or nonfinancial. It shows growth and robust operation status of conducting
business entity (Adu, 2018).
Cash flow: It defines net quantity of gash generate from inflow and out flow activities. Business
associations utilize cash flow announcement into analysis activities that aid in production money
out of finance, investment, and operating tasks. It helps direction to choose decision about their
portfolio polices. Many People think the money flow and gains are comparable conditions
however there will probably be a difference that mention beneath.
Difference between profit and cash flow:
Particular Profit Cash flow
Meaning Positive disparities around
sales profits and production
and operation provisioning
costs.
Value of money that flows in
or out over a given period of
time.
Time There will be no fixed time in
which to measure income. On
a monthly or daily basis,
businesses can be measured
their income.
Cash flow statement is
prepared at the end of financial
year.