The Conceptual Basis

After discussing the necessity of operationalisation and the differences between nominal and real values, the chapter presents the different payment streamsPayment streams , with receipts of payment and outpayments Outpayments being the two fundamental concepts behind the flows of financial resources. Various ways of ensuring liquidityLiquidity are described, and short-term and long-term coverage ratiosRatios Coverage ratios are presented as measuring instruments. Cash flowCash flow calculations are shown to be significant for financial managementFinancial management and budgetingBudgeting . The characteristics of expendituresExpenditures and revenues are shown, and finance calculations and forms of financingFinancing are introduced. The different types of expenses and income are explained, as are methods for calculating earnings, including income statementIncome statement s. Cash flow statements and balance sheets are also presented. Operational and external costs and outputs are described, leading to the proposal for new kinds of financial statement where these are taken into account, using social and ecologicalAccounting ecological accounting to produce outcome-impact statementOutcome-impact statement s.