The Enterprise Comprehensive Analysis Of Cash Flow System And Its Application In Poly Real Estate

Cash flow is like human body blood in an enterprise. An enterprise can not go wellwithout cash flow in market economy, and also an enterprise’s everyday activitiesdepend on cash. Therefore, the cash liquidity is highly impact on an enterprise’ssurvival and development. An enterprise will be running well, if it has a health cashflow condition. And also it would be in a strong competitive position, if it is runningwith good cash flow. However, for example, a company’s accounting profit is veryprominent, but cash liquidity always makes ends meet, we can say that the company isin danger of breaking down all the time.A successful enterprise should have a stable cash flow model–activities of businessrunning and investment are taking a function of "blood-refreshing", through theireternal running and turnover which bring "new blood" for enterprise. Moreover,raising the cash flow is playing a role of intermittent "blood transfusions". Same asthe human body, the enterprise may not completely depend on the "bloodtransfusions" which are in order to survival. The most important is to possess good"blood-refreshing" function, in order to have plenty of cash inflows. Therefore,company will be possible to repay debts, pay interest and go further expansion. If theenterprise violates the basic survival principle, it would trigger the issue of company’scash flow crisis, and makes company go bankrupt. Moreover, as companies work withcash flow unwell, then it directly led to cash shortage and the insufficient payment.Finally, it leads to cash crisis. There are lots of cases such like that. However, stillmany enterprises do not pay enough attention on cash flow management. For theirunderstanding of cash flow management are only focusing on the final preparation ofcash flow statement. Therefore, strengthening the cash flow management, improvingthe corporate financial status, enhancing the liquidity of enterprise assets andincreasing the enterprise economic benefits are becoming the inevitable choice forenterprise development. Enterprise’s cash flows typically divided into cash flows from operating activities,cash flows from investing activities and cash flows from financing activities.Moreover the cash flow is throughout four key elements of flow, process, the flowvelocity and the volume of flow. Most of cash flow theoretical researches areconcentrated in the cash flow statement of quantitative analysis; there are alsonumerous researches which are about free cash flow and investment value of theresearch, and cash flow warning and so on. On the pragmatic research side, they alsoanalyze about cash flow daily management and cash management of the budget.Moreover, also somebody mentioned about four elements of cash flow. But they didnot do the research more details.This article will summarize the theory of cash flow analysis from four elements offlow direction, process, the flow velocity and volume of flow. And form a completeset of cash flow analysis system. In addition, most of free cash flow analysis isapplied to qualitative analysis at the moment. However, the paper will apply it toquantitative analysis. Based on the case study research method, this kind ofestablished system will be applied to businesses, and provide a reference template forenterprise of cash flow analysis system. It is practical value of the paper.