…they would manage where you are going, not just where you’ve been.
My last post highlighted Net Profit, which determines your return on capital. But that’s a paper figure which if not reflected by cash in the bank is meaningless.
So, I look very closely at the cash drivers. Are we giving credit? Why? Are debtors financed by creditors? If not, why not? Are we borrowing to finance the gaps? Do we have enough cash to invest in growth?
I then report to you with recommendations to increase cash inflow.
My next email deals with Cash going out of the business.
Meanwhile, if you don’t have a FD, call me. I’m a fraction of the cost, and I work on the basis that every £1 you invest in me delivers at least a £3 return.
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