1- What information is provided in the operating cash receipts portion of the cash budget? 2...

1- What information is provided in the operating cash receipts portion of the cash budget?

2 - What information is provided in the operating cash payments portion of the cash budget?

3 - Describe the use of Pivot Tables in Excel. Cite 2 examples of how Pivot Tables can be used in decision making by management.

4 - How can financial ratios help to identify the financial strength of a company? Give at least 2 examples of financial ratios that are indicative of a company's liquidity and efficiency.

Expert Solution

Solution:-

1. What information is provided in the operating cash receipts portion of the cash budget:-

The operating cash receipts portion of the cash budget provides the information that pertains to the timing of revenue collection.

2. What information is provided in the operating cash payments portion of the cash budget:-

This is the same as the receipts as you must factor in the time of the payment in the cash budget. If a vendor doesn’t require immediate payment, it is important for the budget to consider when a payment is actually made to that account.

3. Describe the use of Pivot Tables in Excel. Cite 2 examples of how Pivot Tables can be used in decision making by management:-

Because pivot tables summarize data, they can be used to find unique values in a field. This is a good way to quickly see all the values that appear in a field and also find typos, and other inconsistencies.

A pivot table is especially useful with large amounts of data. For example, a store owner might list monthly sales totals for a large number of merchandise items in an Excel spreadsheet. If the owner wanted to know which items sold better in a particular financial quarter, it would be very time-consuming for her to look through pages and pages of figures to find the information. A pivot table would allow the owner to quickly reorganize the data and create a summary for each item for the quarter in question.

4. How can financial ratios help to identify the financial strength of a company? Give at least 2 examples of financial ratios that are indicative of a company's liquidity and efficiency:-

Financial ratios provide a standardized method with which to compare companies and industries. Using ratios puts all companies on a relatively equal playing field in the eyes of analysts; companies are judged on their performance rather than their size, sales volume or market share. Comparing the raw financial data of two companies in the same industry offers only limited insight. Ratios go beyond the numbers to reveal how good a company is at making a profit, funding the business, growing through sales rather than debt and a wide range of other factors.

An older company, for example, might boast 50 times the revenue of a new small business, which would make the older company seem stronger at first glance. Analyzing the two companies with ratios such as return on equity (ROE), return on assets (ROA) and net profit margin may reveal that the smaller company operates much more efficiently, generating substantially more profit per dollar of assets employed.

ekkarill92 answered 6 months ago

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