You Are on a Team Responsible for Addressing Cash Flow

question 144

Essay

You are on a team responsible for addressing cash flow problems with other managers in your corporate division.Your accounting department has provided the statement of cash flows prepared using the indirect method.At your first meeting, some of the managers have expressed concerns about the statement's understandability and do not view the statement as anything other than a "rearranged income statement".The managers have requested that your team explain to them how the statement is constructed.
Required:
a.Explain to your managers why the indirect method is a useful approach to reporting cash flows from operating activities.
b.Explain to your managers why increases in current assets are subtracted from net income and increases in current liabilities are added to net income to calculate the cash flow provided by operating activities.
c.Explain to your managers any differences between the indirect method and the direct method of preparing the investing and financing sections of the statement of cash flows.

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Definitions:

Global Communication Strategy

A coordinated approach to managing and delivering a company's message to its international audience, ensuring consistency across diverse markets.

Media

Represents the various channels of communication, including print, digital, broadcast, and social platforms, used to disseminate information and content.

Language Differences

The variations and distinctions in syntax, grammar, pronunciation, and vocabulary among languages, which can create communication barriers and cultural misunderstandings.

Global Marketers

Professionals or organizations that design, create, and implement marketing strategies tailored to appeal to international markets and cultures.