Cash Flow - Free Essay Example

The notion that â€Å"cash is king† is utilized heavily and is employed by management, analysts, and academics and emphasizes on squeezing more funds from the companies balance sheets (Hasniza et al., 2013). One of the best ways to ensure that the business does well during financially difficult times would be to consider some of the potential opportunities involved in reducing costs. These costs can be reduced in several different ways. For instance, some organizations provide what are considered company â€Å"perks† and these perks typically cost the company a substantial amount of money. These perks can be free soft drinks and coffee in the lobbies, free lunch once a month, or free monthly Internet service, so the associates can work from home. The focus of the majority is directed on the assumption that if liquidity is enhanced, it can improve the accounting based measurements of the collective organization’s financial performance. This notion does not hold true because improving liquidity does increase the shareholders’ value (Hasniza et al., 2013). Shareholders are typically happy with an influx of cash flow (Papaoikonomou, Segarra, Li, 2012). However, during those difficult times when it is important for even the shareholders to accept the fact, there may be some modest changes to ensure the company makes it through those difficult times. At some point, organizations have to understand th at their short-term happiness is not as important as the long-term betterment of the organization (Papaoikonomou, Segarra, Li, 2012). The reality is that the company may want to focus in the future and cut back where possible. This will help in the fact that eventually some of that cash flow will return to the shareholders. Finally, for Christians in business as potential shareholders, it is wise for them to remember that money is not the most important thing in the world. Biblically, Jesus teachings to his disciples revealed that it would be difficult for the wealthy individuals to enter the kingdom of heaven. Therefore, Christians should not focus on only money but should focus their attention the overall success of the organization.