OUTGOING CASH
1. Interest on debt servicing – payable periodically. If the company defaults, a full range of legal consequences can follow including removal of Directors, appointment of Receiver/Manager, rescheduling of company debts, restructuring the company, selling collateral, or winding-up the company.
2. Operating Expenses – also known as Overheads. These are usually all expenses that are not directly related to Production.
3. Plant & Equipment – Also the subject of Capital Budgeting, companies have to decide whether to buy or lease such equipment and how long to keep them to claim Depreciation expenses in their Accounts.
4. Manufacturing Expense and Inventory Control – A major cash flow drain, which does not operate at constant levels. High levels of sales, or large variety of products, require high levels of inventory. Also Inventory builds up to reduce the cost of Production, and as a result of uneven sales.
5. Dividends – both private and public companies pay them, sometimes several times a year. There is no legal obligation to declare or pay dividends.
6. Corporate Taxes – may require to be estimated and paid in advance.
© 2006 Sanjeev Aaron Williams & Cashwerks All Rights Reserved
1. Interest on debt servicing – payable periodically. If the company defaults, a full range of legal consequences can follow including removal of Directors, appointment of Receiver/Manager, rescheduling of company debts, restructuring the company, selling collateral, or winding-up the company.
2. Operating Expenses – also known as Overheads. These are usually all expenses that are not directly related to Production.
3. Plant & Equipment – Also the subject of Capital Budgeting, companies have to decide whether to buy or lease such equipment and how long to keep them to claim Depreciation expenses in their Accounts.
4. Manufacturing Expense and Inventory Control – A major cash flow drain, which does not operate at constant levels. High levels of sales, or large variety of products, require high levels of inventory. Also Inventory builds up to reduce the cost of Production, and as a result of uneven sales.
5. Dividends – both private and public companies pay them, sometimes several times a year. There is no legal obligation to declare or pay dividends.
6. Corporate Taxes – may require to be estimated and paid in advance.
© 2006 Sanjeev Aaron Williams & Cashwerks All Rights Reserved
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