Cash management is a significant part in running business. The cash flow statement shows all of data that appeared during the transaction, such as material, labour, production lines, stocks, interest. In a sense, the statement is more important than profit in the first six months. Figures help manager to determine commercial policies and make accurate decisions.
             According to the information given, our company made a budget on January. 'Cash budgets must interlock with other budget figures, including budgeted debtors and creditors as they move from month to month, and with the capital budget, which contains the budgeted expenditure on fixed assets' (Fleming, 1991:177). However, we calculated product cost wrong because two finished goods were ignored. The product price was instituted too high, so that we could not sell any good in first month. As figure 2 shows, the firm came into being £9,700 overdraft. At the same time, the organization decided to update one standard line to automatic to make more output. Having considered these, we asked the bank for the first £20,000 loan.
             After the first month, we found the problem quickly. On February we were force to lower the price for finished goods to get turnover. Accordingly, the firm got the plentiful cash of £38,200 soon. As Davies said, 'the information it contains is of vital importance to the survival of the organization because without money, operations would have to cease (1999:26). Here again, as we see in figure 1, the company continued to borrow money for upgrading the other product line.
             During March and April the company bought £17,100 and 33,000 materials respectively, occupied 46% and 68% raw materials market share. Meanwhile, we bought two automatic product lines and faced vast overdraft again in March. 'Cash is not profit. Firms can survive in the relatively short term without making profits – many firms make t
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