The FTRANS® Capital Flow Model™ provides a visual representation of the flow of funds in and out of a business.  This visualization shows how assets primarily consume cash while liabilities, equity, and cash flow (earnings before depreciation and amortization) contribute cash.  

Why is this important? 

1.)   In order to increase cash, the business must either increase profits, increase liabilities or equity, or reduce assets.

2.)  For most businesses in America,  Accounts Receivable (A/R) is their largest use of capital.   Put another way, most of a businesses capital is used to fund its customers' purchases.

3.)  For most businesses in America, Accounts Payable (A/P) is their largest source of capital.  Put another way, most businesses owe their vendors more than they owe their banks.  

Check out the Capital Flow Model to see the flow of funds in your business or compare it to multiple other industries:   View the Capital Flow Model