Table of Contents
What is cash velocity?
Cash velocity is the throughput (T) you generate divided by the time it takes to generate the throughput. Throughput is the selling price of your product/service minus what you paid your vendors to generate and sell your product/service. The time it takes to generate the throughput is the cash-to-cash cycle time.
What does cash flow measure?
The statement of cash flows, or the cash flow statement (CFS), is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company. Like the income statement, it also measures the performance of a company over a period of time.
What is the best measure of cash flow?
Free Cash Flow (FCF) FCF is a really useful measure of financial performance and tells a better story than net income because it shows what money the company has left over to expand the business or return to shareholders, after paying dividends, buying back stock, or paying off debt.
Is cash the same as cash flow?
Cash flow is the net amount of cash and cash equivalents being transferred into and out of a company. Positive cash flow indicates that a company’s liquid assets are increasing, enabling it to settle debts, reinvest in its business, return money to shareholders and pay expenses.
How is velocity of money measured?
The velocity of money can be calculated as the ratio of nominal gross domestic product (GDP) to the money supply (V=PQ/M), which can be used to gauge the economy’s strength or people’s willingness to spend money.
What does PY mean in economics?
Page 1. MV = PY. M = money supply, V = velocity of money, P = price level, Y = real GDP.
What is another word for cash flow?
In this page you can discover 12 synonyms, antonyms, idiomatic expressions, and related words for cash flow, like: pecuniary resources, available means, profitability, working capital, capital, available funds, stock-in-trade, available resources, cashflows, cashflow and liquidity.
What is alternative cash flow measures?
279. uing ability to generate favorable cash flows than information limited. to the financial effects of cash receipts and payments. [
Is cash flow same as free cash flow?
Cash flow finds out the net cash inflow of operating, investing, and financing activities of the business. Free cash flow is used to find out the present value of the business. The main objective is to find out the actual net cash inflow of the business.
What are the determinants of velocity of money?
Although the velocity of money cannot be measured directly nor is it predictable over the short term, it is determined by both the demand for money and the supply quantity of money. An increased money supply will lower money velocity, while a decreased money supply will increase money velocity, all else being equal.