Forward Contracts


Forward contracts are similar to futures contracts in that they are agreements to buy and sell an asset at a certain time in the future for a certain price. However, unlike futures contracts, they are not traded on an exchange. They are private agreements between two financial institutions or between a financial institution and one of its corporate clients.

 One of the parties to a forward contract assumes a long position and agrees to buy assets at a certain specified date for a certain price. The other party assumes a short position and agrees to sell the asset on the same date for the same price. Forward contracts do not have to conform to the standards of a particular exchange. The delivery date in the contract can be any date mutually convenient to the two parties. Usually, in forward contracts, a single delivery date is specified, whereas in futures contract, there is a range of possible delivery dates.

 Forward contracts are not marked to market daily like futures contracts. The two parties contract to settle up on the specified delivery date. Whereas most futures contracts are closed out prior to delivery, most forward contracts do lead to delivery of the physical asset or to final settlement in cash

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Just about Cash Flow


Cash flow is different from profit. Profit is the difference between revenues and expenses. Cash flow is the difference between receipts and disbursements of cash. Profit may flow whether or not anybody has paid for anything. Cash flows only when somebody pays for something. Time after time, businesses with good sales and good profits go broke. It is surprisingly commonplace. The problem is the the cash doesn’t flow when the profit flows.

The explanations for the large number of new business failures, undercapitalization, inadequate management, and poor marketing, may be valid, but the overwhelming reason is that the managers did not understand cash flow. They behaved as if profit were cash, which is not. They acted as if all that is needed to win the business game is to make a profit, which is not true. Cash is different from profit. You need both to win the business game.

A business can survive and thrive only if it has both positive profit (not losses) and positive cash flow (more flowing into the bank than out of it). To win you must produce more than you consume, and you must do it in such a way that you can meet critical payments as they come due.

Profit may be the most common measure of whether a business is winning or losing, but cash flow is the most critical measure. Businesses can survive a surprisingly long time without profit. They die on the first payday there is no cash.

Your company’s bank is like a jar is a reservoir, so it is the gas tank. And what is in the reservoir is easy to measure. The amount in the reservoir is what was put in minus what was taken out. A convenient way to measure whether the supply is increasing or decreasing is to measure whether more was entering or leaving during the most recent period of time. Cash flow into the bank account is such a measure. How much is in the reservoir is of intetrest, of course, but it is changed by changing the cash flow.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Preparing Minutes


There are two primary rules for minute preparation:

  1. Write Minutes as Soon as Possible: Time edges into memory faster than most people realize. Events which just took place are more clearly in mind than those occurring 24 hours ago. Write minutes as soon as possible after a session. Do not delay minute preparation. Notes are grand, and the better your notes, the better the minutes you will write. But notes are no substitute for accurate recall plus notes. This is why, in the absence of a manager being assigned to record the minutes, the group leader should either take full responsibility for the task or, immediately, at the beginning of the meeting, assign it to someone. Recall is important. That’s why the minutes should always be done as soon after the session as possible. Not as soon as convenient. As soon as possible. The minutes should never be written by anyone other than a person in attendance who took notes. Those notes, no matter how copious, passed to someone who was not in attendance, will not produce quality minutes.
  2. State Important Facts Briefly but Thoroughly: When writing the minutes, be brief but be as thorough as possible. In minutes, the requirement is names and dates and figures. Many minutes recount each motion and even the major directions and positions in the discussions. Too few tell who forged those directions and who took and/or held those positions. To be valuable, minutes must be thorough.

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight

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