Cash Flow and Cash Position Analysis

Understanding your cash position and getting the most out of it can be difference between meeting your revenue goals or falling short. Here is an example of how a little knowledge can make a difference in your bottom line.

If your Bank or Credit Union puts 20 million dollars in loans on the books in 2025 what

impact will that have on your cash position? 

a) reduce it by 20 million dollars

b) reduce it by 15 million dollars

c) reduce it by 10 million dollars

Would you be surprised if the number was closer to  c) 10 million dollars

Knowing the answer is a critical part of budgeting process.

If you budget using answer b) 15 million dollar and the actual is 10 million then you have

lost the opportunity to put some or all of that 5 million dollars to work for you. 

Recently we concluded a consultation for a small credit union. Part that assignment was to perform a cash flow and cash position analysis. What the final report showed what that if they met their goal of putting 13 million dollars in new loans on their books in 2025 that their position would only be reduced by 5 million dollars. This knowledge led to the purchase a 2 million participation which will provide $10,000 per month in Interest Income for a number years

Having a better understanding of your cash position allows you get the most out of your cash

You can read more on that consultation on our "Success Story Of The Month Page"