What is the excess of cash flows?

Excess cash flow is a term used with reference to the additional or excessive cash that the company performs after the fulfillment of its financial obligations. This means that excess money flow is increasing due to its business activities and the company can use it for any specified purpose after fulfilling the usual financial obligations. Some of the financial obligations that the Company might have could include the payment of rent for its premises, the money spent on the purchase of raw materials, salaries of employees, and dividend payments for companies with duty to shareholders.

This excess money flow not only serves as a supplement to the usual cash flow of the company concerned, but also serves as a type of scale that creditors assign a percentage value for repayment of outstanding loans. Status Quo to repay any of the loan that could have been providedTheness of the financial institution brings the ascending movement, because the repayment conditions for the loan at a time when the excess cash flow is established, will be increased to reflect additional income and speed up the repayment of the loan. For example, if the company was expected to pay a specified percentage of a loan per month, this matrix will be adjusted for another percentage, the exact amount of which will be determined by the calculation of all the factors surrounding this company in relation to its excess money flow.

of the above can be assumed that not only a company that directly generates funds will experience excessive cash flow because the financial company that is connected to the company concerned, for example, provided the bank has lent money to furniture just declared surplus Flow, the bank usually expects the furniture company to pay the excess money flow. to the bank. The bank can require this paymentFrom the furniture company where the analysis of its financial affairs shows that such a company has no other capital expenditure or other compulsory financial obligations for which it could require money.