Factors Influencing the Cash Flow from Operating Activities

Abstract

This article discusses the issue of shaping the cash flow from operating activities, which are main source of generating cash in an enterprise. Cash flow plays an important role in cash management. From this point of view, a key aspect is the area of operating activities because it reflects the cash flow from the core business of each enterprise. After defining the basic concepts and presenting the cash flow from all business areas, the article proceeds to analyse the external determinants of the cash flow from operating activities, on which a company has no direct influence and can only try to adapt its operations to the changing environment. The last part examines the internal factors influencing cash flow, which are a reflection of the cash management policy in a company. Next, the impact of principal decision-making areas is presented and analysed, which include the choice of depreciation methods, as well as inventory, cash, receivables and liabilities management. The paper is theoretical in nature and can be a basis for future empirical research.