Cash Flow and Liquidity

The absolutely most important asset of any business is cash and near cash items. Near cash items include accounts receivable and inventory. The first step following the completion of an agreement to perform a consulting engagement is to complete a snapshot of the current cash and liquidity position as well as the near term forecast of cash and liquidity positions. Near term is defined as eight weeks. The forecast is updated weekly with one week dropping off and one week added. The resulting schedules are named the eight week rolling cash flow and financial flash. This file is the a foundation tool for the business and consulting project. It tells management whether the business is strengthening or weakening in the near term and it reports on the impact of management decision arising out of the consulting engagement.