Why a positive result does not mean financial security

A company can be profitable and still run into liquidity problems. This is exactly what happens more often in SMEs than many people think: the P&L looks solid, the result is positive, but there is pressure on the account.

The reason often lies not in a lack of profitability, but in cash flows, investments, receivables terms and working capital. Those who do not actively plan for these interrelationships often only recognize bottlenecks when they are already noticeable.

In our free live webinar, we will use a specific practical example to show you why profit and liquidity can fall apart, which simple adjustments influence cash flow and how you can make bottlenecks visible at an early stage.

What the webinar is about

The focus is on a simple, sector-independent model company. At first glance, the P&L appears healthy. The result is positive. At the same time, a look at the cash flow shows that liquidity can become scarce.

Using this example, we show why an investment is hardly noticeable in the income statement but immediately creates a significant gap in cash flow. We then show live in Corporate Planner how specific measures affect liquidity, such as a shorter debtor term or changed payment terms with suppliers.

This involves a simple, comprehensible control logic: What happens in the result? What happens in the account? And which key figures help you to better understand your own liquidity?

Typical questions from practice

Many companies know their earnings performance very precisely, but much less precisely when money actually flows in or out. In the webinar, we therefore address questions that are regularly crucial in practice:

• Why can a company report a profit and still have liquidity problems?
• What effect do investments have on the income statement, balance sheet and cash flow?
• How strongly do collection periods influence the available cash flow?
• What happens if customers pay later than planned?
• Which key figures should the management know in order to recognize liquidity risks earlier?
• How can cash flow effects be presented in an understandable way without getting lost in financial details?

Your advantages in everyday working life

After the webinar, you will be able to distinguish more clearly between earnings and liquidity and avoid typical misinterpretations. You will see why a positive EBIT alone is not enough to assess the financial stability of a company.

You will gain a better understanding of which operational parameters influence cash flow. These include, in particular, payment terms, payment targets, investments and working capital. At the same time, you will see how these factors can be comprehensibly mapped in integrated planning.

The main practical benefit lies in managing liquidity with foresight rather than looking back. This makes bottlenecks visible earlier and decisions can be made on a more reliable basis.

Who is the webinar suitable for?

The webinar is aimed at CFOs, controllers and managing directors of medium-sized companies who want to focus their corporate management more on liquidity and financial impact.

It is particularly relevant for companies that currently use P&L, EBIT or earnings figures to manage their business, but do not yet consistently integrate cash flow and liquidity into their planning. The webinar is also easy to understand for managers without in-depth financial knowledge, as the relationships are explained using a simple practical example.

Your benefits at a glance

You will learn,

• How profit and cash flow can diverge
• Why a positive result does not automatically mean liquidity
• what role investments, receivables and payment terms play
• such as days sales outstanding and free cash flow as performance indicators help
• how measures have a direct impact on cash flow
• How integrated planning makes bottlenecks visible earlier

Why TD Trusted Decisions?

TD Trusted Decisions supports medium-sized companies in making their planning, reporting and corporate management clearer, more integrated and more decision-oriented.

Our experience shows: The biggest challenge is rarely just the software. The decisive factor is whether the result, balance sheet, cash flow and operating assumptions are linked in a meaningful way. Only then does a reliable view of the company’s financial development emerge.

In the webinar, we combine professional experience from consulting with a concrete live presentation in Corporate Planner. This makes it clear how integrated planning works in practice and how companies can not only monitor their liquidity, but actively manage it.