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.