What does financing mean?


What does financing mean?

Financing refers to the method of attracting financial resources to pay for activities and/or make investments. When we talk about financial resources, we are referring to the extent to which you have access to money.

Financial resources are necessary to enable the use of capacity, purchase raw materials, etc. The need for these resources partly varies with the scale of the activities, but also follows a somewhat fixed pattern.

Through your company's cash flow, you ensure insight into the different cash flows and, most importantly, how you can influence them. The latter is crucial to ensure there are always sufficient financial resources to meet your obligations.

Do not forget the importance of a 12-month rolling forecast. This forecast provides insight into how your organization's activities will develop over the next 12 months. It also guides the associated figures, including operating results (or EBIT) and Cash Flow.

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