Question

1. pretend you are a consultant and you are paid to advise a company on an expansion project. Which would you prefer? And why?

2. Because the statement of cash flows is often a challenge for everybody to learn, what steps are you going to take to either memorize or learn the direct AND indirect method. Please share these with your peers. Why is this statement so important for a company?

Answer 1

• arget Market is the customer group that you feel will most likely want to buy your products or services. This group is defined by your customer profile.
• Customer Profile is a detailed profile of your typical customer. For individual consumers, it includes information such as age, income, gender, marital status, profession and buying habits. For businesses, it includes the types of business, number of years in business, number of employees, annual revenues and products or services sold.
• Demographics are the characteristics of a population such as size, growth, age, income, gender, marital status and buying habits. This information helps you decide whether this target market is large enough for your products or services in the target area.
• Market Analysis is an analysis of research data that results in determinations about the marketability of a product or service in the given market.

A systematic approach is the best way to find a new market. Without it, you can waste a lot of precious resources — something a small business does not have an excess of. The following steps will effectively and efficiently guide you through the new market development process:

• Define Your New Target Market(s)
• Do Your Market Research
• Decide To Enter This Market Or Look For Another
• Enter The Target Market

The cash flow report is important because it informs the reader of the business cash position. ... It needs cash to pay its expenses, to pay bank loans, to pay taxes and to purchase new assets. A cash flow report determines whether a business has enough cash to do exactly.

The cash flow report is important because it informs the reader of the business cash position. For a business to be successful, it must have sufficient cash at all times. It needs cash to pay its expenses, to pay bank loans, to pay taxes and to purchase new assets. A cash flow report determines whether a business has enough cash to do exactly this.

Having cash is a key requirement for a business to stay solvent. When a business has no longer enough cash to pay its dues, it is often declared bankrupt.

For this introduction to accounting, we will not go through the actual preparation of an actual cash flow report. In fact in the business world, small businesses rarely produce a cash flow report, as profit and loss report is sufficient for their needs. It is unlikely that a small business such as a bakery will involve complex non cash transactions that would warrant such information. Therefore, it is considered a waste of time and money to have an accountant prepare a report that would be of little use to anyone!

On the other hand, for large entities such as Nike and Microsoft, having a cash flow report is imperative. Such companies will often have a significant amount of non-cash transactions, sometimes even billions of dollars in revenue that is simply owed to them but hasn’t been received in cash yet. In these situations, a profit and loss statement is not always sufficient, and a cash flow report is valuable to many users, such as banks and shareholders.