what are the main question that an analyst should ask in analyzing the sources and uses...

what are the main question that an analyst should ask in analyzing the sources and uses of cash in a business? 8marks

Expert Solution

Sol:

In business, the main question that an analyst should ask in analyzing the sources and uses of cash is to check the summary of where the capital comes from and where it is spent . Sources account should be equal to uses account. It is a cash flow statement which shows a business’s cash inflow and cash outflow over an accounting period. Business should classify the cash flows into operating , investing and financing activities.

The main sources of cash are

Debt (bonds, debentures,loans) , preference share, equity share.
Net income after tax
Receipts of loan repayment

The uses of cash are on

working capital:- In this the fund is used for its day to day operations and also to meet its current liabilities.
fixed assets :- Fund are used to acquire the property , plant and equipment.
set off the losses
payment of loans

Hence ,cash flow statement should be prepared and the analyzer should check the sources and uses side of the statement.

jeff jeffy answered 17 hours ago

What questions related to system troubleshooting should a systems analyst ask?

what questions should the analyst try to answer when analyzing the trend of a firm's sales...

what questions should the analyst try to answer when analyzing the trend of a firm's sales number? This is a discussion about the Income Statment and Stockholder's Equity

What are the three main cash sources and uses activities found on a statement of cash...

What are the three main cash sources and uses activities found on a statement of cash flow? A. Revenues, Costs, and Income B. Assets, Liabilities, and Equity C. Net Income, CapEx, and Mergers and Acquisitions D. Operating, Investing, and Financing

For analyzing international opportunities, there are two sources of data, primary and secondary. Describe the main...

For analyzing international opportunities, there are two sources of data, primary and secondary. Describe the main sources of secondary data.

When it comes to interpreting the location quotient the primary question the analyst needs to ask...

When it comes to interpreting the location quotient the primary question the analyst needs to ask a.How does the local economy's location quotient compare to that of the US as a whole b. is the location quotient greater than or less than 100 c. is the location quotient positive or negative e.Is the location quotient greater than or less than 1 Which one of the following is NOT one of the requirements for a use to be a site's highest...

what are the main sources of funds for Apple's company in 2017-19? what are the main...

what are the main sources of funds for Apple's company in 2017-19? what are the main sources of funds for Samsung's company in 2017-19? what are the main uses of funds for apple's company in 2017-19? what are the main uses of funds for Samsung's company in 2017-19?

What are the main sources of alternative, or renewable, energy?

What is meant by "a cluster of firms" and what are the three main sources of...

What is meant by "a cluster of firms" and what are the three main sources of the economic advantages derived from locating in such a district?

1. When analyzing a firm’s financial performance, should the analyst focus on the incremental after-tax profits...

1. When analyzing a firm’s financial performance, should the analyst focus on the incremental after-tax profits or the incremental after-tax cash flows of the firm? Explain your reasoning! 2. Holding all else constant, how would a significant increase in interest bearing debt impact the measure of the firm’s Free Cash Flow? Explain! 3. If a firm uses an accelerated depreciation expense method (MACRS) versus straight line depreciation expense for a newly acquired asset, what would be the impact on the...

Question A. What factors should management consider in choosing among the various sources of external capital?...

Question A. What factors should management consider in choosing among the various sources of external capital? Question B. What is the ICGR, and why is it important to the management of a financial firm?

Question