Question

In: Accounting

All this focus on protecting cash has jogged Mark’s memory and he recalls working on Cash...

All this focus on protecting cash has jogged Mark’s memory and he recalls working on Cash Flow Statements and Cash Budgets while at University. Mark would like you to explain to him the role of these two items in the protection and management of cash.

Solutions

Expert Solution

cash flow statement and cash budget:-

cash flow statement tell the overall flow of the cash whether inflow or outflow from all the related business transactions. All the related business transaction can be categorised into three category i.e

(1) operating activities (2) finacial activities (3) investment activities. cash flow stament shows the historical movement of the cash in the given perioed of time from the above mentions activities.

In such way it helps to understand the business that how much cash is getting and expnesing though business operations. similary financing activities describe the historical movement of getting funds from shares debentures or other source of finance and repayment of short term and long term credit or loans. Further investing activies decribes the utilisation of funds into purchase of long term and short term assest. Mangement of cash is best through cash flow statements as it tells that how much cash is generating business and in which expenses it is metting out. Cash generated through long term sources should be used in long terms assets generating which is described by financing and investing activities.

Importance of cash budget. Like other budgets cash budget forcast the future cash flow. It describe how much cash will be collected and at what time and how it will be utilised. It is generally said that what is on black and white can be easily controlled. How much cash willbe collected form debtors and payment of creditors in due time. similary cash from sales or from financing activites is considered and if it is short arrangement is done through bank credit or loan or other proper form according to the time span, liquidity or cost basis.A proper level needs to be maintaned through cash budget in the entity. If cash is shortfall, it is arranged and if it is excess then it is invested to generate income. Cash budget provides the management a level to maintain through best activities and if there any deviation from that standard then reasons are to find and corrective measures to be taken.

Conclusion:-cash is liquid asses and needs to be properly controlled and managed. Becaused excess of it decrease profit of the firm and its misutilisation whereas lack of it can affects the functionalty of the firm.


Related Solutions

Demyelination of the brain can result in _______. multiple sclerosis poor working memory slower processing all...
Demyelination of the brain can result in _______. multiple sclerosis poor working memory slower processing all of the above Based on the information in D2L, older adults are typically as good as younger adults at determining _____. when they should switch strategies which items are most likely to be remembered how many items they will get right on a future memory test how long a strategy is taking
Hello, I am working on a C-program that deals with memory mapping, Please show all code...
Hello, I am working on a C-program that deals with memory mapping, Please show all code (code must be in the C) and outputs. The instructions are as follows INSTRUCTIONS: You have two sample c codes, one for the client and one for the server. IF the client makes a change in the shared memory, those changes will show on the server side. Your task is to adapt the change strategy to develop two applications so they can send messages...
Scenario: A psychologist has been studying the effect of deterioration of memory over time. He has...
Scenario: A psychologist has been studying the effect of deterioration of memory over time. He has been interested in how memory for particularly startling events, called flashbulb memories, might differ from memory for everyday events. He asked college students to try to remember all the circumstances of an ordinary event (such as meeting a friend) and then immediately after the event to fill out a survey about the details of the event. He knew from vast amounts of prior research...
Todd has been working on a tax research question for a client. He knows he will...
Todd has been working on a tax research question for a client. He knows he will be referring the issue to the client’s CPA and attorney, but he wanted to give the client some general information about how the issue could be handled and they wanted to discuss it together. Todd has found several private letter rulings, one court case, and a revenue ruling, all from 1980 or earlier that are contrary to what his client is trying to do....
Jack had been working on his gas furnace all afternoon. He finally thought that he fixed...
Jack had been working on his gas furnace all afternoon. He finally thought that he fixed the old, dilapidated furnace. It was going to get really cold that evening so he wanted to make sure that the furnace would keep them warm all night. Jack went to bed at 11:00 p.m. as usual but he noticed that he had a slight headache before going to bed. He just thought that he needed to sleep. His wife and kids also had...
Johnny Minor is 16 years old and he has been working odd jobs since he was...
Johnny Minor is 16 years old and he has been working odd jobs since he was about 10. Being unusually industrious, and having inherited some money from an uncle he never knew, he has managed to save enough money to buy the used car of his dreams, which happens to be a classic 1980 Porsche 911 Targa. This particular Porsche model is unusual in that it tends to appreciate in value rather than losing value by the minute. Collectors will...
Timothy has been working as a senior accountant in Dell Headquarter for 10 years. He has...
Timothy has been working as a senior accountant in Dell Headquarter for 10 years. He has multitude of responsibilities, including:  Examining bank statements and reconciling them with general ledger entries  Examining expenses submitted by employees  Keeping an eye on incoming payments from accounts receivable and outgoing payments from accounts payable  Creating company financial reports with the above information included  Analysing data collected in order to determine the state of the company’s financial health  Leading...
What was net operating working capital for 2018 and 2019? Assume that all cash is excess cash; i.e., this cash is not needed for operating purposes.
Balance Sheets as of December 31 2019 2018 Assets Cash and equivalents $  13,000 $  11,000 Accounts receivable 30,000 25,000 Inventories 28,095 24,000   Total current assets $ 71,095 $ 60,000 Net plant and equipment 54,000 49,000 Total assets $125,095 $109,000 Liabilities and Equity Accounts payable $ 10,800 $  8,500 Accruals 7,400 5,000 Notes payable 6,500 5,050   Total current liabilities $ 24,700 $ 18,550 Long-term bonds 15,000 15,000   Total liabilities $ 39,700 $ 33,550 Common stock (4,000 shares) 60,000 60,000 Retained...
Siddhartha has 50 hours per week to devote to work or leisure. He has been working...
Siddhartha has 50 hours per week to devote to work or leisure. He has been working for $8 per hour, but now that he has finished an introductory economics class, his earning power has shot up to $16 per hour. Based on the information in the table below, calculate his original utility-maximizing choice and his utility-maximizing choice after the wage increase. Hours of Leisure Total Utility from Leisure Income Total Utility from Income 0 — 0 — 10 200 80...
Roger's brother, Henry has also been working on a new venture. He has invested $20,000 and...
Roger's brother, Henry has also been working on a new venture. He has invested $20,000 and six months of sweat equity to date in developing the concept. While he believes the idea has the same growth and profit potential as Roger's company, he knows that outside investors will require more detailed research and proof of his business model before putting up the $800,000 - 900,000 required to launch the company. To take the company to an appropriate stage for serious...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT