Question

please write three complete and well-composed paragraphs where you use, as an example, a company that operates where you live and describe how you think the company enhances its cash flows? Does it rely solely on internal operations to obtain the funds it needs to run its business? Or does it contact outside parties to obtain investment funds by issuing stock, bonds, or borrowing in another way?

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Answer 1

Hypothetical situation

I work in a multinantional company. We operate in the agricultural sector and are currently operating within the country but covering majority of the states. I am the head of the finance department of the company.

We require huge amount of working capital for running our business. Our major sources of working capital and cpital expenditure are as follows :-

• Funds from the operation- Our primary source of funding like ay other compny iss through our operations. The recovery period from the ebtor is more than the recovery period of the creditor therefore we cannot solely depend on the funds from internal operation.
• Equity share capital- Our's is listed company. Currently we have a market cap of 10,000,000 share at $74 each. It has been a main source for the expansion of our business like any other company.
• Cash credit limit- We have a huge inventory against which we have our credit . We use are CC limit to fund our working capital needs.