One is A Powerful Number In Business

To Improve Your Cash Flow, One is The Number

Every business has a seven financial principals that underpins the way they operate from a financial viewpoint.

Not knowing your principals is like walking through a maze blindfolded. These consist of the four drivers of profit and three drivers of the balance sheet.

The four drivers of profit are:

  • Price
  • Volume
  • Direct costs/Cost of Goods
  • Overheads

The three drivers of the balance sheet are:

  • Accounts Receivable days
  • Inventory days
  • Accounts Payable days

They are the drivers that management should have some control over. Business improvement is driven by changes to these drivers.