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Strategic Financial Management The Main Term Paper

Or that the Company may have decided to transact business on cash basis or pay its debt to its suppliers as evidenced on decrease of accounts payable, thus cash outflow incurs. As a result, instead of cash produced, operating activities used $114,000 of its $200,000 fund. In analyzing the investing and financing activities, the Company decided to outlay $450,000 cash to purchase an equipment and provide cash dividends to shareholders amounting to $250,000, contributing to Cash' further decrease.

With the previous illustration, we can see that the Company may be incurring an income of $100,000 however; it also indicates a decreased of Cash from $200,000 to $21,000. A negative or decrease in Cash Flow may indicate trouble if not properly managed. A decrease in cash by $179,000 may mean its cash is not properly managed enough to fund its business operations. Thus, the Company needs to evaluate and learn to manage its cash to sustain...

Considering time is money, the Company has to maximize its resources, particularly the working capital. Suggested measures can be reducing inventory level by proper planning to minimize storage cost and other related expenses. Collect receivables faster by decreasing credit term or offering discounts for cash purchases. Maximize credit term with suppliers. In turn, if the Company has the available fund, it can use the money to other resources like short-term or temporary investment, thus giving additional income.
Bibliography

Valix, Conrado T, (2005). Theory of Accounts. GIC Enerprises & Co., Inc.

Financial Statements. (2007). Retrieved November 25, 2007 from https://www.pwcglobal.com

Financial Statements. (2007). Retrieved November 25, 2007 from http://www.investopedia.com

Sources used in this document:
Bibliography

Valix, Conrado T, (2005). Theory of Accounts. GIC Enerprises & Co., Inc.

Financial Statements. (2007). Retrieved November 25, 2007 from https://www.pwcglobal.com

Financial Statements. (2007). Retrieved November 25, 2007 from http://www.investopedia.com
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