Ways Companies Can Augment Reported Cash Flow
Common methods include:
- Sales - Sell the receivables to a factor for instant cash. (leading)
- Inventory - Don't pay your suppliers for an additional few weeks at period end. (lagging)
- Sales Commissions - Management can form a separate (but unrelated) company and act as its agent. The book of business can then be purchased quarterly as an investment.
- Wages - Remunerate with stock options.
- Maintenance - Contract with the predecessor company that you prepay five years worth for them to continue doing the work
- Equipment Leases - Buy it
- Rent - Buy the property (sale and lease back, for example).
- Oil Exploration costs - Replace reserves by buying another company's.
- Research & Development - Wait for the product to be proven by a start-up lab; then buy the lab.
- Consulting Fees - Pay in shares from treasury since usually to related parties
- Interest - Issue convertible debt where the conversion rate changes with the unpaid interest.
- Taxes - Buy shelf companies with TaxLossCarryForward's. Or gussy up the purchase by buying a lab or O&G explore co. with the same TLCF.
Read more about this topic: Cash Flow
Famous quotes containing the words ways, companies, augment, reported, cash and/or flow:
“Parents find many different ways to work their way through the assertiveness of their two-year-olds, but seeing that assertiveness as positive energy being directed toward growth as a competent individual may open up some new possibilities.”
—Fred Rogers (20th century)
“The recent attempt to secure a charter from the State of North Dakota for a lottery company, the pending effort to obtain from the State of Louisiana a renewal of the charter of the Louisiana State Lottery, and the establishment of one or more lottery companies at Mexican towns near our border, have served the good purpose of calling public attention to an evil of vast proportions.”
—Benjamin Harrison (1833–1901)
“A bureaucracy is sure to think that its duty is to augment official power, official business, or official members, rather than to leave free the energies of mankind; it overdoes the quantity of government, as well as impairs its quality. The truth is, that a skilled bureaucracy ... is, though it boasts of an appearance of science, quite inconsistent with the true principles of the art of business.”
—Walter Bagehot (1826–1877)
“When offense occurred, Slaughter took the trail, and seldom returned with a live prisoner. Usually he reported that he had chased the suspect “clean out of the county”; these suspects never reappeared in Tombstone—or anywhere else.”
—Administration in the State of Ariz, U.S. public relief program (1935-1943)
“If when a businessman speaks of minority employment, or air pollution, or poverty, he speaks in the language of a certified public accountant analyzing a corporate balance sheet, who is to know that he understands the human problems behind the statistical ones? If the businessman would stop talking like a computer printout or a page from the corporate annual report, other people would stop thinking he had a cash register for a heart. It is as simple as that—but that isn’t simple.”
—Louis B. Lundborg (1906–1981)
“A flow of words is a sure sign of duplicity.”
—Honoré De Balzac (1799–1850)