Mgsc312 Essay

Items that can be converted into cash quickly are called current assets. These would include, cash on hand, inventory, short-term investments and accounts receivable. Liabilities are financial obligations that the organization owes. For example, short-term notes payable; loans that come due in less than one year and accounts payable; money owned for goods and services provided to the business.

We are living in market society, which is so different from previous societies. In market society, the whole of society is a system of self-regulating market (Polanyi 43). In order to make the market society function, people need to think and act in certain ways(Polanyi 68). For example, people in market society think that economic relations are much more important than interpersonal relations (Polanyi 44). Polanyi calls the emergence of market society “the great transformation”. My thesis statement is that the shift to market society is a

3) Purchasing power parity and the exchange rate in the long run (how exchange rate is

iv. Cash flow from assets = Cash flow to creditors + Cash flow to stockholders

Cash flow problems cannot always be avoided as they are simply a single part of many factors that affect a business or organisations overall financial health. The flow of the monetary holdings is measured by the entirely of a company’s financial assets and not just the amount that is earned on profits. At one time or another, almost every business will experience some sort of

3. Which of the following financial statements lists the entity 's assets, liabilities, and capital as

In my opinion corporate governance fails because of bad decisions made by the CEO’s, Board of Directors, Shareholders, and Top Management. “One of the many problems that defenders of America's free market system fail to address is the severe dysfunction at the top of the nation's big public companies. Cases in point include some of the biggest bankruptcies of the last decade: Lehman Brothers, General Motors, WorldCom, Enron and many more” (Cohan, 2009). Our text states that “good corporate governance means better strategic management” (Wheelen&Hunger, 2012 pg. 63) which means that corporate governance fails because of poor strategic management. “The systemic failure of corporate governance

These liabilities are described as what the business or organization owes such as accounts payable, payroll taxes due, notes payable, and mortgages payable are all liabilities. Assets are economic resources that have expected future benefits to the business (Baker & Baker, 2000). It is described as what the business or organization owns or controls. This can include cash, accounts receivable, notes receivable, and inventory.

“ The fact is that one of the earliest lessons I learned in business was that balance sheets and income statements are fiction, cash flow is reality” (Chocola, C 2014). Chocola is eluding to the possibility of a profitable company failing due to lack of cash flow. Cash flow is an accurate indicator of a company’s stability. The discrepancy between the balance sheet, income statement, and cash flow is due to revenue from sales being recognized on the balance sheet and income statement before it is collected. However, until the income from the sale is received there is no cash flow to reinvest, produce additional product to be sold, or to pay expenses. It is necessary to establish a positive cash flow before considering expanding a business.

For the cash flow analysis, the company recorded an overall cash outflow for the past two years and the total cash and cash equivalents starting to decline from 2006. Lack of cash is an serious problem for the company because it affect the liquidity of a company.

Using the information in your Gantt chart, as well as the information on wage rates and cost of materials, put together a budget showing planned day-to-day expenditures for the project.

In the textbook I read “cash is necessary to meet payroll and other business costs. It is needed for capital

Many organizations make a financial goal to minimize the amount of cash on hand on a monthly basis. This goal is based on attempting to reduce the amount of non-earning assets for the company. Cash on hand that is not required to meet a specific need could be placed in an interest bearing account or used to pay down on a credit balance, also reducing the amount of interest a company would have to pay on a loan. “Minimizing cash balances as well as having accurate knowledge of when cash moves into and out of the company can improve overall corporate profitability.” (Block & Hirt, 2004, pg. 175).

The elapsed time before an asset becomes cash or a liability is settled is called liquidity (Spiceland, 115). A liquid company is one which can quickly generate cash from its assets and pay its short-term liabilities on time (Spiceland, 365) (Libby, 453). Current assets are positioned in order of decreasing liquidity on the balance sheet, and liabilities are listed in order of how quickly these debts are expected to be settled (Spiceland, 117) (Libby, 45).

Cash generated from different activities such as operating, investing and financing can be seen from the cash flow statement. From the above three activities, the main source is operating activity to generate cash flow , which is 180000 in ABC company and used for the other activities which are investing and financing. Specifically, the company used 100000 for the purchase of fixed asset for expansion in future and used 100000 for the payments of dividend to the shareholders. Amount which the company has used is 200000 but actually it was having only 180000 therefore cash flow statement is showing deficit of 20000.