The lifeblood of a business is its cash flow which is the essence of financial management. With a positive cash flow, operations can proceed smoothly and allow decision-makers to make the best decisions possible.
In the absence of a positive cash flow, decision-makers are hamstrung by the inability to pay operational expenses. Subsequently, the business ends up implementing a plan or taking a course of action that is not optimal. Almost every decision related to the operation of the business can have a significant impact on the end result and ultimately affect cash flows.
Therefore, the entire business cycle comes into play and focus needs to be on those areas that can be fine-tuned to enhance cash flow.