Capella University Chapter 3 Analyzing Cash Flow and Measurement Discussion

Analyzing Cash Flow and Measurement

Organizations use cash-flow analyses to manage the amount of liquidity they want to maintain.

In your initial post, identify the strategies and approaches organizations use to conduct a cash-flow analysis to determine cash position and liquidity. Explain why cash flow is important.

Support your post with sources and cite them according to current APA guidelines. Be sure to critically evaluate the concepts and related literature. Address any pro and con arguments.

Response Guidelines

Read the posts of your peers and respond to at least one. Provide additional reasons cash flow is important or suggest another approach or perspective on conducting a cash-flow analysis. As you did in your initial post, use your research to support your claims and be sure to cite your sources according to APA guidelines.

Learning Components

This activity will help you achieve the following learning components:

Describe best practices for managing funds in a nonprofit organization.

Identify internal controls commonly used by nonprofit organizations to manage funds.


In your Budgeting and Financial Management for Nonprofit Organizations textbook, read the following:

  • Chapter 3, “Liquidity and Managing Cash Flow,” pages 51–68. 
  • Chapter 4, “Costs and Cost Analysis,” pages 69–87.

Use the Internet to read the following:

Optional Readings

You may find the following ebooks of interest as you explore the content in this unit. These readings are optional and are not required. Use the Capella University Library to access them.

  • Francois, E. J. P. (2014). Financial sustainability for nonprofit organizations. New York, NY: Springer Publishing Company.
  • McLaughlin, T. A. (2016). Streetsmart financial basics for nonprofit managers. New York, NY: John Wiley & Sons.


“Cash-flow planning and analysis are applicable in the context of program expansion as well as that of daily operation.” Weikart L. A., Chen G. G., & Sermier E. (2012)”.If there is no cash flow than the organization will become stagnant. For example my organization , we fund raise twicwe a year and our stake holdres that contribute cash flow are important to our livelehood. The key indicators of the long-term financial health of a nonprofit organization is imperitive. As we do not have a budget but relie on the income of other resources. “A well-developed cash-flow budget alerts a nonprofit when cash is excessive and needs to be put into short- or long-term investments. A cash budget can also predict a nonprofit’s cash-flow gaps, periods when cash outflows exceed cash inflows.” (Weikart L. A., Chen G. G., & Sermier E. (2012)”. However upon review of the BRAGG project I know understand that during the winter and summer months are predicted to be excessive and that there are gaps in services during the spring and fall months due to when cash outflows exceed cash inflows. Cash-flow management is the process of projecting, monitoring, analyzing, and adjusting cash inflows, cash outflows, and cash balances. In most organizations, cash inflows and outflows occur at different times, and cash inflows normally lag behind cash outflows (this is known as the cash conversion cycle in the business world). Many nonprofits do not have large cash reserves, and they “live hand to mouth.” A cash shortage can be very disruptive to a nonprofit’s ability to carry out its mission. (Weikart L. A., Chen G. G., & Sermier E. (2012). Hence we are not in business during these months or lack funding and resources.

Weikart L. A., Chen G. G., & Sermier E. (2012). Budgeting and Financial Management for Nonprofit Organizations: Using Money to Drive Mission Success. [Capella]. Retrieved from…

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