Analyzing Cash Flows by a Non-Account Ceo

Analyzing Cash Flows in a Small Company from a Non-Accountant CEO’s Perspective

Dr. John M. Cavendish

American Public University

Author Note

John M. Cavendish is currently an MBA student at American Public University. This paper is submitted in partial fulfillment of the course requirements for BUSN601.

Abstract

In order to understand an organization’s complete financial picture it is essential that we understand its cash flows. Unfortunately, many new CEOs in small companies don’t have the ability, nor does the expertise reside within the organization. This paper presents a case study on this problem, and the solutions that were implemented to solve it.

Analyzing Cash Flows in a Small Company from a Non-Accountant CEO’s Perspective

Introduction

Like many who ultimately end up in top management positions, the author had a certain disdain for accounting and finance courses while he was a student. After all, isn’t management about people? Don’t managers hire accountants to take care of all that boring financial stuff? At least that’s what we believed as skimmed through those courses, putting in just enough effort to avoid seriously damaging our GPAs. Consequently, when we take our places in the ‘real world’ we’ve usually forgotten most of the finance and accounting information that we retained just long enough to pass our exams, and move on. This lack of enthusiasm is usually rewarded during our first few working years because we are usually not allowed to know about our company’s finances, much less tinker with them. However, if we are worth anything to our respective organizations, there comes a time when we are confronted with everything we don’t know about handling the company’s money. If we are fortunate, we may have been groomed for our new positions by a mentor who had the knowledge and skills we failed to acquire in school. If we are not so fortunate, we may have jumped for a promotion, and found that the financial water...