Discuss some factors or events that could lead to a positive net income but negative cash flow from operations. In your reading, you learned about the Statement of Cash Flows, including activity classification. In your initial posting, address the following:
Discuss some factors or events that could lead to a positive net income but negative cash flow from operations.
Explain any concerns that you might have about a company that reports negative cash flows from operations for three consecutive years.
Explain why depreciation expense, depletion expense, and amortization expense are added to net income in the operating activities section of the Statement of Cash Flows when using the indirect method.
Recommend three ways that a company might improve their cash flows.
Reference
Miller-Nobles/Mattison. Horngren’s accounting: The financial chapters (7th ed.). Pearson.
Discussion Post #2
Make sure your response addressing the following question is more than 200 words, and you include an in-text citation or a brief quote from the reading material where appropriate.
Prior to beginning work on this discussion, review Chapters 16 and 17 of Horngren’s Accounting: The Financial Chapters (7th ed.) textbook.
In your reading this week, you learned about the types of ratios used to assess a company’s performance and financial position.
Recommend one ratio to assess a company’s ability to pay current liabilities (also called liquidity ratios). Explain your choice.
Recommend one ratio to assess a company’s profitability. Explain your choice.
Describe a situation in your future professional or personal life where you may need to evaluate a company’s financial performance.
Reference
Miller-Nobles/Mattison. Horngren’s accounting: The financial chapters (7th ed.). Pearson.
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