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Cash Flow Essay

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Below is an essay on "Cash Flow" from Anti Essays, your source for research papers, essays, and term paper examples.

Use the above information and make conclusions regarding the cash flow of this business.
• The cash from operating activities has a positive amount of R 39920, which means that the business has a strong cash flow.
• The accounts receivable has increased from R 6000 to R102000, which means that there was an inflow of cash.
• The accounts payable has decreased from R 215000 to R 175000, which means that the business decreased its liabilities and cash flow out of the business.
• Cash flow was positively effected as the business received (debtors) more in cash flow then they paid (creditors) . The net inflow was R 96000 – R 40500.
• The inventory also decreased from R 209000 to R 160000, which means that the business did not spend money on buying raw materials. Cash did not flow out of the business to purchase raw materials.
• The sale of assets (land and building, furniture, vehicles) means that cash flow into the business and the purchase of assets (plant and equipment) means that cash flow out of the business. The purchase of assets means that the business is in a position to buy assets to grow and develop.
• R 46000 was the net inflow due to sale of assets vs purchase of assets.
• Investment (sold shares) increased from R 40000 to R 50000, which means that cash flow into the business, because investors bought more shares in the business. Dividends will increase in the next year, which will have a negative effect on next year’s cash flow.
• The increase of the loan from R 80000 to R 100000 is an inflow of cash for the business. The interest paid will increase, which will have a negative effect on next year’s cash flow. The payback of the loan will also have a negative effect on next year’s cash flow.
• Interest paid will increase due to the increase in the loan.
• There is a negative cash flow of R16000 at the end of the period.
• To change the negative cash flow to a positive cash flow the business can manage their creditors better so that less...

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Cash Flow. Anti Essays. Retrieved December 13, 2018, from the World Wide Web: http://trenmayamx.com/free-essays/Cash-Flow-190643.html