Revenue is vanity, profit is reality and cash is certainty. In medical analogy, revenue is the food, profit may be the water and cash is the oxygen. You can’t pay rent with profit, you can pay only your rent with hard cash. Cash talks, the remainder walks.Just like a critically ill person must be administered with fresh oxygen, an ailing company’s immediate lifeline is cash, cash and more cash. Fresh fund injections will air max 2012 provide the fillip needed to obtain the system moving forward an even keel in addition to create stable platforms for growth.In almost every turnaround situation, there’s a troubled project that is bleeding or draining cash in an accelerated speed. For any variety of unhealthy reasons such as neglect, denial or mismanagement, these problems remain unresolved. The turnaround team need to apply the tourniquet and immediately stop the continuous haemorrhage and unrelenting outflow of money. The turnaround team’s task is to stomp out the fire and reduce the rate of burnt-out. The West would call this “stopping the bull by its horns,” and the East calls it ‘catching the tiger by its tail.” The managers have to adopt this method during restructuring. Also they need to promote ‘corporate catharsis’to purify the system and hang a dark tone from the mode of operation. It is no more business as usual.Other cash flow problem arises once the bank recalls its loan or terminate other credit lines to the company. In Singapore, many small , medium size enterprises (SMEs) encounter income problems once the local banks cut or lessen the bank loans. In 2003, there was a record a lot of 4484 those who were declared as new bankrupts. In the past there have been six major local banks with banking officers who understood the sentiments and businesses of SMEs and had close banking relationships together.However, in recent years with mergers and restructuring in the local banking scene, only four major banks remain with lots of of those banking air max 95 shoes officers retrenched and also the loans from banks to the SMEs drastically reduced. The banks’ understanding and rapport with the SMEs are lost. The brand new air max 2009 banking officers are stricter and loans aren’t provided to SMEs, which exceed the banking credit facilities and don’t provide proper accounting records. Also, the neighborhood banks have shifted their focus to other low-risk and fee-based services. The Singapore SMEs are afflicted by ‘corporate asphyxia’, missing out on its vital oxygen supply – cash.The demands for funds is going to be there – make payment on rental, workers’ salaries, bank loan and interests, implementing new technology, upgrading current equipment, reviving R&D, providing advertising support to brands, training people, acquiring competitors to add critical mass to the company, and so on, their email list really is limitless.Hence it is essential for that turnaround manager to find ways of improving short-term liquidity, cut costs and at the same time, negotiate new loans in the current lenders.Measures to enhance income include – reducing inventory and disposal of obsolete ones, tightening stock control, increasing the selling price, divesting ventures that do not add value to the core business, reducing costs, finding refinancing, factoring the receivables, implementing sales and leaseback, exploiting hidden assets, recouping prepaid expense, renting out idle capacities and persuading the client to pay for cash as well as in advance as well as laying off/downsizing. Fresh funding is crucial to jump starting the machine. Avoid bankruptcy and enhance your income.Every bad debt starts out as a slow repayment, so you need to be vigilant of your collections. Disproportionately high receivables and inventory are trouble signs. The balance sheet calls them assets. They ought to really be called liabilities. Cash is an asset, you can purchase a lot of things with it. Mounting inventory or receivables may be the first warning that the service or product is slipping while your earnings statement still shows profits. Also do not confuse external borrowing with positive cash flow. Proper accounting says it is, but this really is short-term thinking. Only sales collected would be the authentic income. All else is temporary or even worse.Managing cash flow to satisfy working capital requirements is essential. With insufficient working capital, a company can wind up despite being profitable. However, an unprofitable business can continue operations if it has sufficient cash to pay for its creditors.Though money is not everything, its degree of importance is equivalent to oxygen. Without them, you will certainly perish.