Financial Intelligence for IT Professionals: What You Really Need to Know About the Numbers
by Karen Berman, Joe Knight, John Case
16
The Language of Cash Flow
You’d think a cash flow statement would be easy to read. Since cash is real money, there are no assumptions and estimates incorporated in the numbers. Cash coming in is a positive number, cash going out is a negative one, and net cash is simply the sum of the two. In fact, though, we find that nearly every nonfinancial manager takes a while to understand a cash flow statement. One reason is that it is always divided into categories, and the labels on the categories can be confusing. A second reason is that the positives and the negatives aren’t always clear. For example, a typical line item might say, “(increase)/decrease in accounts receivable,” followed by a positive or a negative number. Well, is it an increase ...
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Read now
Unlock full access