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Flows of Box

In the finances, box flow (well-known in English like “cash flow?), talks about to the amount of money in cash received and used by a company during a period of defined time, sometimes tie a specific project.

Whereas in Portugal, only as of January 1, 2003 the declaration of cash flow will be required, through the modification of the Directive of Accounting N º 14, this is one of the indicators more used by the financial analysts like a measurement of the yield company. The analysis of box flow allows to the generation of financial resources and its use in a determined period of time.

In accounting, a projection of box flow shows to all the payments (the right) and the income, in a determined period of time. The controller of box flow needs a general vision all the enterprise functions, like the payments, receipts, purchases of raw materials, the purchases of secondary materials, the wages and others, it is necessary to anticipate and that they would be possible to be spent in future based on which she consumes nowadays.

The cash flow is a great tool to help in particular to the administrator of a company in the decision making. It is through this “map? that variable the fixed costs and are evident, allowing this way an effective control on certain subjects of businesses.

There are several measures of capacity to characterize the yield of an investment project: the results of the exercise (the project) are prime facie that the measurement of the yield by the excellence of the project activity. It is that the declaration of the rent (benefit) is a measurement that depends on a series of procedures like the adopted accounting records (like the method of valuation of existence, depreciation and amortization, etc), reason why has generally, for same company for that year, two measures different from benefits, tributary administration and one for the shareholders.

Different measures from the net rent (gains) would give rise, if the opportunity that was using the income like a measurement of the yield of the project, that these procedures could take to consider a good project of a bad project. In order to avoid the dependancy of the measurement of the yield of the project of the countable procedure, it is used like a measurement of the yield of the flow of box of the project.

The concept of cash flow talks about in cash to the net flows generated by the project in the form of money. The advantage of flow of box for the benefit is the box flow is an objective concept, defined well, that can be registered of unequivocal way. The real income and payments in cash are the pertinent registries for the measurement of cash flow. In the definition of cash flow it is important to in cash identify the income and payments of the project and the period of time in which the flow is generated, since the money has value in the time. This concept is divided in the investment project: flow of box of cash flow of the investment operative flow of box of the investment obtains from the global investment and the operation of the company plan. These concepts are independent and to measure the different things if we measured the yield that we used the concept of cash flow, if we want to measure the solution which we used the concept of cash flow.

Financial cycles

The flows can be divided in three main cycles: the cycle of investment, the cycle of operation and the cycle of the financial transactions, in which the cycle of the financial transactions is made up of the transactions of capital and operations of treasury.

The investment activities include the acquisition and disposition of immaterial materials and.

The financial investments that are not considered like cash equivalents: the payments and income for the purchase and sale of assets, payments and income for the purchase and sale of action, bonds and other debts, advance payments and loans and their payments, payments and the income corresponding to contracts of futures, options and SWAP, except when one is the operative activity or they are classified like financing activities.

Activities of operation are the set of activities that the object of form of the company. In which it generates the accounts of cyclical general balance sheet cyclical, the accounts to receive and to pay in the short term related to the operation.

The financing activities, as a result of the changes in the reach and the composition of the loans and capital of the company.

Methods of preparation of the state of cash flow

The state of cash flow can be produced by two different methods, unless it is a society quoted in stock market from the CMV demands that they appear the companies to use the direct method.

Direct method: One in cash reveals the main components of the income and payments in cash in gross terms, the adjustment of the sales, the cost of sales and other articles.

Indirect method: It consists of the adjustment of the net income of the operations different from the cash, the interests devengados and deferred related to the income and payments of accounts and the future income or costs associated with the cash flow related to the financing activities and investment. (one concentrates in the differences between the net benefit and cash flow of operation activities).


As with other indicators of business analysis, the use of the relations facilitates the analysis, therefore, a series of coefficients derived from the box flows, that left some examples here: - ratios of cover - ratios of quality of the results -- ratios of financing of the investment - ratios of financial yield of

It would be an error, mainly, to consider that the cash flow can be used only by the companies. Nowadays, and more people are interested more in a more efficient economic organization. At present there are in the market different types from tools that she intends to facilitate the preparation of cash flow. Some companies even offer tools specific for individuals and companies, along with manuals on watch excellent and material.

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