what do you think about the impact of construction projects on firm's financial positios and market value?
Answers
KEY TAKEAWAYS
- Cash flow is the amount of money and cash equivalents that move in and out of a business at any given time.
- Positive cash flow means a company has more cash than liabilities, while a consistent negative cash flow means a business is doomed to fail.
- Construction companies can turn cash flow positive by spreading out their costs, sending out invoices immediately, accepting electronic payments, and avoid over- and underbilling.
Cash flow is one of the most important measurements in business. It is the amount of money and cash equivalents that move in and out of a business at any given time. Companies that have a positive cash flow have more money than liabilities. This allows them to stay in the black and cover their bills every month. By contrast, those with negative cash flows don't have enough money coming in to fulfill their monthly obligations.As mentioned above, having a negative cash flow means there may be financial problems for a business and, if not turned around, may lead to the ultimate downfall of the company. Doing this may be challenging, but there are a few strategies construction and contracting companies can employ to go from being in the red to getting back into the black.