You Have Been Assigned to a Team Responsible for Evaluating

question 25

Essay

You have been assigned to a team responsible for evaluating the company results based on the statement of cash flows.One of your responsibilities is to determine how much cash should be kept on hand.On the statement of cash flows your team has identified the following issues:
Operating activities did not generate a positive cash flow
Cash was generated primarily from the sale of plant assets
Additional shares of stock were sold during the year
No loans were taken out during the year,and a substantial portion of debt was retired
Required:
Answer the following questions relating to interpreting the statement of cash flows.
a.Why is it important for a company to generate cash from operating activities on a consistent basis?
b.What might a trend toward providing cash through investing activities suggest about a business?
c.What factors might influence how much cash should be kept on hand?
Unit 13-4,

---

Definitions:

MIDI File

A digital file format that stores music data, such as notes, timing, and instrument information, allowing electronic musical instruments and computers to interact.

Custom Installation

The process of installing only those features of a software program that a user wants on the hard drive.

Data Category

A classification of data based on shared characteristics, making data management more efficient.

Audio Compression

A technique to reduce the size of audio files by removing unnecessary data, while trying to maintain the original sound quality as much as possible.