You have been assigned to a team responsible for evaluating the company results based on the statement of cash flows.One of your responsibilities is to determine how much cash should be kept on hand.On the statement of cash flows your team has identified the following issues:
Operating activities did not generate a positive cash flow
Cash was generated primarily from the sale of plant assets
Additional shares of stock were sold during the year
No loans were taken out during the year,and a substantial portion of debt was retired
Required:
Answer the following questions relating to interpreting the statement of cash flows.
a.Why is it important for a company to generate cash from operating activities on a consistent basis?
b.What might a trend toward providing cash through investing activities suggest about a business?
c.What factors might influence how much cash should be kept on hand?
Unit 13-4,
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q152: Assume your friend has taken an accounting
Q153: The following balances were gathered from Brannon
Q154: Alma Ortiz prepared Carlee Instruments' balance
Q155: Morris Industries reported the following cash transactions
Q156: Berry Corporation reported the following cash transactions
Q158: You are on a team responsible for
Q159: Alma Ortiz prepared Carlee Instruments' balance
Q160: Wil Wheaton,Kirk Enterprises' controller,is preparing the
Q162: You are on a team responsible for
Q163: Answer the following questions regarding the calculation
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents