COURSE OVERVIEW:
Welcome to the Cash Flow Management course. This program will equip you with the skills and knowledge to understand how cash moves through a business, analyse the relationship between profit and cash, and apply practical methods to plan, monitor, and improve cash flow performance. Throughout this course, you will develop a clear grasp of the language, tools, and decisions that sit behind healthy liquidity, so you can help ensure that a profitable business also remains solvent and financially resilient.
This course begins by clarifying the fundamentals of cash and cash flow so that you can build decisions on a solid foundation. You will examine what cash is, the uses of cash in a business, and its role as a medium of exchange in day-to-day transactions. You will then explore what cashflow is, how cashflows into and out of the business are managed, and how the cashflow statement and cashflow forecasts are used to plan and monitor movements over time. You will analyse the difference between profit and cash, why profit is not the same as cash, what profit actually represents, and how goods and services can flow at different times and in the opposite direction to cash. You will also learn how the reconciliation of profit to cash is carried out, how the reconciliation statement is structured, and how the link between profit and cashflow is interpreted in practice.
The course then looks at the key components that influence the translation of accounting results into cash outcomes. You will consider what operating profit is and how it differs from net profit, and what depreciation represents in financial reporting. You will explore why increasing or decreasing the depreciation charge does not affect the cash position directly, and how increased investment in stock (inventory) ties up cash and affects liquidity. You will examine the difference between debtors and creditors, what interest, tax, and dividends represent in cash terms, and what capital expenditure is and how it impacts both long-term assets and short-term cash availability. This foundation will help you see how each item in the accounts has a cashflow consequence that must be managed deliberately.
Attention then turns to practical levers for improving cashflow so that you can influence outcomes rather than just report them. You will learn how to improve cashflow by increasing operating profit, increasing sales in a controlled way, and maintaining sales while decreasing costs through efficiency and cost control. You will examine how to reduce interest paid, how to minimise borrowings and secure better rates, and how to reduce tax paid through legitimate planning rather than avoidance. You will also consider how to reduce dividends paid where appropriate, how to reduce or reschedule capital expenditure to protect liquidity, and how to strengthen the balance sheet by increasing share capital and loans when additional funding is required.
The course then moves into working capital management as the engine room of day-to-day cash control. You will explore what working capital is and how to manage it in a structured way, and why efficient management of working capital is the key to successful cash management in most trading businesses. You will examine the working capital cycle, how much working capital is required to support operations, and how much working capital you should aim to hold in different circumstances. You will also consider how to reduce risks associated with tight or excessive working capital positions and how to measure performance in a way that supports timely decisions rather than reactive fixes.
From there, the course focuses on ratios, performance indicators, and techniques for driving cash improvements. You will learn what ratios are, how ratios are used to express working capital management performance, and how they help compare performance over time or against targets. You will examine what stock days are and how to calculate them, what debtor and creditor days are and how to calculate those measures, and how these indicators highlight where cash is tied up unnecessarily. You will then explore how to reduce working capital by tightening collection processes and inventory control, how to manage stock and debtors write-offs, how to drive out surplus investment from slow-moving or obsolete items, how to carry out causal analysis to understand underlying issues, and how to move towards just-in-time (J.I.T.) approaches where appropriate to reduce capital tied up in working capital.
By the end of this course, you will be able to explain clearly what cash and cashflow are, interpret cashflow statements and forecasts, and reconcile profit to cash in a way that makes sense to non-specialists. You will understand the impact of depreciation, stock, debtors, creditors, interest, tax, dividends, and capital expenditure on cash, and you will know how to apply practical levers to improve cashflow while supporting sustainable profitability. Most importantly, you will be equipped to manage working capital using appropriate ratios, diagnose cashflow pressures early, and apply structured analysis and improvement techniques so that your business can fund its operations, meet its obligations, and support future growth with confidence.
LEARNING OUTCOMES:
By the end of this course, you will be able to understand:
- The medium of exchange
- What is cashflow?
- How to manage cashflows into and out of the business?
- The cashflow statement
- The cashflow forecasts
- Profit versus cash
- Why profit is not cash?
- What is profit?
- How goods and services flow at different times, and in the opposite direction, to cash?
- The reconciliation of profit to cash
- The reconciliation statement
- The link between profit and cashflow
- What is operating profit?
- What is depreciation?
- How increasing or decreasing the charge for depreciation will not affect the cash position?
- How increased investment in stock ties up cash?
- The difference between debtors and creditors
- What are interest, tax and dividends?
- What is capital expenditure?
- How to improve cashflow?
- How to increase operating profit?
- How to increase sales?
- How to maintain sales whilst decreasing costs?
- How to reduce interest paid?
- How to minimise borrowings and minimise rates?
- How to reduce tax paid?
- How to reduce dividends paid?
- How to reduce or reschedule capital expenditure?
- How to increase share capital and loans?
- What is working capital?
- How to manage working capital?
- Why efficient management of working capital is the key to successful cash management?
- The working capital cycle
- How much working capital is required?
- How much working capital should I have?
- How to reduce risks?
- How to measure performance?
- What is ratios?
- How ratios are used to express working capital management performance?
- What is stock days? And how to calculate them?
- What is debtor/creditor days? And how to calculate them?
- How to reduce working capital?
- How to make stock and debtors write-offs?
- How to drive out surplus investment?
- How to carry out a causal analysis?
- How to move towards J.I.T.?
COURSE DURATION:
The typical duration of this course is approximately 2-3 hours to complete. Your enrolment is Valid for 12 Months. Start anytime and study at your own pace.
ASSESSMENT:
A simple 10-question true or false quiz with Unlimited Submission Attempts.
CERTIFICATION:
Upon course completion, you will receive a customised digital “Certificate of Completion”.