It is important for a company to earn high profits but it is far more important to generate cash flows and speed up these cash flows in order to survive in a competitive environment especially during the financial crisis of modern times. The speed of cash flows can be improved by several techniques in various companies and industries. The free cash flows of a company indicate the real financial position of a company and provide a more relevant measure of a company’s performance. The high earnings reported in the income statement of a company does not mean that the financial position of a company is quite strong as was seen with financial institutions in the early period of the current financial crisis. The previous researches and books provide a firm foundation for further research to be carried out in the area of cash flows.
The current research is based on the concept of cash flows and analyses the techniques of speeding up cash flows implemented by companies in the retailing industry. The research indicates that these techniques are dependent on delayed payment of cash outflows and early receipt of cash inflows among other factors. The current research is based on a case study of two companies from the retailing industry. The research has been carried out using a qualitative approach and the primary data is collected through survey questionnaires sent to the two companies. The secondary data for this research was collected from books, articles, websites and annual reports of Marks and Spencer and Debenhams which are the two companies included in the case study. The research presents a conclusion by accepting the research hypothesis that the speed of cash flows is dependent on multiple techniques rather than a single technique. The structure of this report for dealing with the issues related to speeding up of cash flows is based on several chapters which include the introduction, literature review, research methodology, findings and conclusion.
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