4. Suppose the company shows positive cash flow and management asks you if that means the...
4. Suppose the company shows positive cash flow and management asks you if that means the company is doing well. What do you reply?
Homework Answers
Positive cash flow- It is the situation when cash inflow is higher than cash outflow.
If company is having positive cash flow, it is a good sign for company. Positive cash flow indicates, company is liquid and having adequate cash, it can easily meet its working capital requirement, it can pay its short term debts easily and early. If company has positive cash flow, it pays the salaries on time.
On the other hands, if positive cash flow is in large amount, it indicates that company's cash is lying idle and it is not utilizing it properly. It does not mean profit always, it means, company may not maintain enough inventory that can affect its sales. due to shortfall of raw material or finished goods stock.
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4. Suppose the company shows positive cash flow and
management asks you if that means the...
Assume that you have two Possible outcomes: 50% chance of a positive cash flow of $2,000 50% chan...
Assume that you have two Possible outcomes: 50% chance of a positive cash flow of $2,000 50% chance of a positive cash flow of $1,000 What is your Expected Cash Flow? Then, how often will you actually get that value? That is, what is the probability, the percentage of the time, that you will actually get the cash flow that you expected?
Assume that you have two Possible outcomes: 50% chance of a positive cash flow of $2,000 50% chance...
The cash flow statement was not required by GAAP until 1988. Why do you think the...
The cash flow statement was not required by GAAP until 1988. Why do you think the SEC added the cash flow statement to the required annual reports? What is its importance for managers and external investors? What is the importance of Ratio Analysis for both management and external investors? (Answer in one or two brief, but well-developed, paragraphs.)
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The Arizona Corporation reported positive net income but negative cash flow from operations. Further, despite the...
The Arizona Corporation reported positive net income but negative cash flow from operations. Further, despite the negative cash flow from operations, the company continued to pay its regular dividend on its common shares. Discuss why it is possible for a company to report positive net income when the cash flow from operations is negative. Do you agree with the firm’s strategy of maintaining its regular dividend? Why or why not?
1. A company reported net income of $100,000 and positive net cash flow of $100,000. Does...
1. A company reported net income of $100,000 and positive net cash flow of $100,000. Does net income and a positive net cash flow represent the same thing? Why or why not?
How do you calculate is the Net cash flow provided by operations? Avatar Company uses the...
How do you calculate is the Net cash flow provided by operations? Avatar Company uses the indirect method to prepare the statement of cash flows. Please refer to the following income statement Sales revenue $240,000 Interest revenue 1,000 Gain on sale of plant assets 4,000 Total revenues and gains $245,000 Cout of goods sold 110,000 Salary expense 45,000 Depreciation expense 12,000 Other operating expenses 23,000 Interest expense 1,000 Income tax expense 5,000 Total expenses $196,000 Net income (loss) $49.000 Other...
A cash-flow statement shows you where your money comes from and where it goes. There are...
A cash-flow statement shows you where your money comes from and where it goes. There are three sections. The first is the on. The section. It reflects all cash inflows including income from wages, gifts, investments, and so section is next, where expenses are classified as fixed or variable. And the last part is the of the cash in and cash out, which shows what you have left or what you have overspent in a given time period The following...
A restaurant in the Cash Flow year 1 shows that the operation is projected to lose...
A restaurant in the Cash Flow year 1 shows that the operation is projected to lose -46,892 over the year. In other words, based on projections, there will be a deficit in the bank accounts of -46,892. What are some of possible solutions? In year one is showing a positive P&L for the year. Why is there a difference? How can one see a positive P&L yet not have cash in the bank?
A cash-flow statement shows you where your money comes from and where it g first is...
A cash-flow statement shows you where your money comes from and where it g first is the on. The oes. There are three sections. The section. It reflects all cash inflows including income from wages, gifts, investments, and so section is next, where expenses are classified as fixed or variable. And the last part is the of the cash in and cash out, which shows what you have left or what you have overspent in a given time period The...
The table to the right shows expenses and income for an individual. Find the net monthly cash flow (it could be negative or positive). Assume that salaries and wages are after taxes, ncome and assume...
The table to the right shows expenses and income for an individual. Find the net monthly cash flow (it could be negative or positive). Assume that salaries and wages are after taxes, ncome and assume 1 month 4 weeks Expenses month Rent ary Grocenes: $100/week Utilties: $115 month Health insurance: S380 semiannually Car insurance: $440 semiannually Gasoline. $40/week Miscelaneous: $430/month Phone: $90/month The net monthly cash flow is Round to the neerest doller as needed.)
The table to the right...
Assume that you have two Possible outcomes: 50% chance of a positive cash flow of $2,000 50% chance of a positive cash flow of $1,000 What is your Expected Cash Flow? Then, how often will you actually get that value? That is, what is the probability, the percentage of the time, that you will actually get the cash flow that you expected?
Assume that you have two Possible outcomes: 50% chance of a positive cash flow of $2,000 50% chance...
How do you calculate is the Net cash flow provided by operations? Avatar Company uses the indirect method to prepare the statement of cash flows. Please refer to the following income statement Sales revenue $240,000 Interest revenue 1,000 Gain on sale of plant assets 4,000 Total revenues and gains $245,000 Cout of goods sold 110,000 Salary expense 45,000 Depreciation expense 12,000 Other operating expenses 23,000 Interest expense 1,000 Income tax expense 5,000 Total expenses $196,000 Net income (loss) $49.000 Other...
A cash-flow statement shows you where your money comes from and where it goes. There are three sections. The first is the on. The section. It reflects all cash inflows including income from wages, gifts, investments, and so section is next, where expenses are classified as fixed or variable. And the last part is the of the cash in and cash out, which shows what you have left or what you have overspent in a given time period The following...
A cash-flow statement shows you where your money comes from and where it g first is the on. The oes. There are three sections. The section. It reflects all cash inflows including income from wages, gifts, investments, and so section is next, where expenses are classified as fixed or variable. And the last part is the of the cash in and cash out, which shows what you have left or what you have overspent in a given time period The...
The table to the right shows expenses and income for an individual. Find the net monthly cash flow (it could be negative or positive). Assume that salaries and wages are after taxes, ncome and assume 1 month 4 weeks Expenses month Rent ary Grocenes: $100/week Utilties: $115 month Health insurance: S380 semiannually Car insurance: $440 semiannually Gasoline. $40/week Miscelaneous: $430/month Phone: $90/month The net monthly cash flow is Round to the neerest doller as needed.)
The table to the right...
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