Why cash is king (TT Oct04 p38)

Corporate financial scandals such as Enron and WorldCom have caused banks to cut back the availability of short-term credit. According to a recent online poll, 64% of banks and 47% of corporates believe this will be the case for the foreseeable future. A company’s cashflow is now considered a significant lending criterion, with 81% of banks and 85% of corporates believing it outranks historic P&L. Cash forecasts must go beyond two-week timeframes and just treasury cash.