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:
“Philosophy, having crept clinging to the rocks so far, puts out its feelers many ways in vain.”
—Henry David Thoreau (1817–1862)
“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)
“It is reported here that the King of Prussia has gone mad and has been locked up. There would be nothing bad about that: at least that might of his would no longer be a menace, and you could breathe freely for a while. I much prefer madmen who are locked up to those who are not.”
—Philip Dormer Stanhope, 4th Earl Chesterfield (1694–1773)
“It seems I impregnated Marge
So I do rather feel, by and large,
Some cash should be tendered
For services rendered,
But I can’t quite decide what to charge.”
—Anonymous.
“Parents ought, through their own behavior and the values by which they live, to provide direction for their children. But they need to rid themselves of the idea that there are surefire methods which, when well applied, will produce certain predictable results. Whatever we do with and for our children ought to flow from our understanding of and our feelings for the particular situation and the relation we wish to exist between us and our child.”
—Bruno Bettelheim (20th century)