9/7/2023 0 Comments Cash flow synonym![]() ![]() ![]() But if it takes in only $35,000 and has $100,000 in expenses, it has a negative cash flow of $65,000. Cash flow.Ĭash flow is a measure of changes in a company's cash account during an accounting period, specifically its cash income minus the cash payments it makes.įor example, if a car dealership sells $100,000 worth of cars in a month and spends $35,000 on expenses, it has a positive cash flow of $65,000. Copyright © 2003 by Houghton Mifflin Company. Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Operating cash flow, calculated as cash flow (the sum of net income and noncash expenses such as depreciation, depletion, and amortization) plus interest expense plus income tax expense, is an important consideration in corporate acquisitions because it indicates the cash flow that is available to service a firm's debt. Thus, although TCI reported an additional loss, the quarter was generally considered quite successful. It also reported a 5% increase in cash flow. At the same time, the firm added more than a million new customers and reported a 25% increase in revenues. In early 1996, TCI Communications, at the time the nation's largest cable operator, reported fourth-quarter results that included a net loss of $70 million, more than double the loss reported in the year-earlier quarter. Cable companies have huge investment requirements and are typical of firms that may be quite healthy in spite of reporting net losses. A firm with large amounts of new investments and corresponding high depreciation charges might report low or negative earnings at the same time it has large cash flows to service debt and to acquire additional assets. Reduced income generally means lower taxes and more cash, thus the same accounting practices that reduce net income can actually increase cash flow. ![]() On the other hand, reported net income is heavily influenced by a firm's accounting practices. Increased cash flow means more funds are available to pay dividends, service or reduce debt, and invest in new assets. So actually it is a very big step of the total credit growth for merchant lending growing much beyond, not just for them but for others also is my personal opinion.ĭon’t miss out on ET Prime stories! Get your daily dose of business updates on WhatsApp.Case Study Financial analysts generally consider cash flow to be the best measure of a company's financial health. So actually a large player entering in that would open up big market because of their trade data availability, they would be able to provide credit to millions of new merchant and they will become credit worthy which means that that would expand credit for every other player in the market itself. Having said that, the total credit gap for small businesses in India is staggering $400 billion of which the merchant financing is around $150 odd billion. When you do merchant lending as an independent unit, then it is like an unsecured loan, it becomes a little difficult because you do not know real movement of the cash flow. So obviously they can do this in very big sizes so they will have both focus on consumer as well as merchant. The merchant lending in ecosystem, the company which you are naming have a large ecosystem wherein on the retail chain you have merchants which are selling the material, which are buying the material so they will have the benefit of the trade data and basis that they can provide the credit. You should divide it in two part, merchant lending in an ecosystem and merchant lending as an independent business. Is there space for everybody? Is the economics very lucrative there or only risk is high? So if India's most valued and largest company is looking at that piece as an opportunity, you are working there for long. And so I want to understand how large is this opportunity? You work with all across SMEs, MSMEs, right? This one big lender, which is taking shape from a conglomerate gradually is also looking at that merchant lending opportunity. And in the lending space, what we pick up is that lending to merchants in their ecosystem be it retail etc. One thing I wanted to ask you as an industry participant, not as a representative of U GRO there is a very big kind of a big start-up which is being born in the lending space, perhaps the biggest start-up over one lakh crore in valuation which is being born tomorrow. So real collection efficiency should be seen and what is the resolution rate of that and that we are very good at that so it is more than 97-98%.īut in terms of the net loan origination, the first quarter we have the net loan origination of around 500 odd crore. ![]()
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