[Management Column Vol. 7] Are You Aware of Your Company's Constitution?

basic information

Please use this as hints for management decisions, such as building a management foundation, improving management quality, cash flow management, bank relations, business succession, and restructuring after the appointment of the second or third generation. Additionally, feel free to contact us with any questions or inquiries when putting this into practice.

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Applications/Examples of results

<What Can Be Understood from Financial Analysis> Example 1) According to the cash flow statement, since the operating cash flow and operating income are positive, it is clear that the cash flow can be managed through rescheduling. Example 2) If things continue as they are, the company's cash reserves will run out in a few months, but it is evident from the financial statements that new borrowing is impossible. Example 3) If we can simultaneously proceed with not only rescheduling but also withdrawing from unprofitable businesses, we can establish a plan for cash flow management. Example 4) Although we are planning a new business to eliminate the operating losses, borrowing is unlikely due to the lack of a concrete plan, especially a financial plan. However, according to the cash flow statement, we can at least stabilize cash flow through rescheduling for the time being. Financial analysis is "the most objective material available at least in the initial stage when external organizations, such as financial institutions, consider whether to lend to that company, based on certain rules." - Financial statements analyze past conditions. - Trial balances analyze current conditions. - Cash flow (planning) statements analyze future conditions. Please keep in mind that if you have these three points in order, you can handle bank interactions adequately. Next time, I will convey "Having a strong will to endure the time until harvest."