How to incease profitability in a service company if Operating cash does not cover debt?

Q: Is the Profit that a business makes a reliable indicator of its cash balances? What are the…

A: No, The profit that a business makes is not a reliable indicator of its cash balance. This is…

Q: what determines the market value of a company are not profits, per se, but rather, cash flows?

A: Market value of a company : In simple words, the market value of a company refers to the value of a…

Q: How is it possible for a firm to grow itself out of business and how can this be guarded against as…

A: Finance managers are accounting experts concerned for a company or organization's financial…

Q: Explain "free cash flows." Why do managers like to retain free cash flows instead of distributing it…

A: Free cash flows (FCF) equals the amount left with the company after the required payments to the…

Q: Is it in the best interests of the company to borrow money?

A: Introduction: Obtaining finances in debt is significantly more straightforward for companies than…

Q: Why is an analysis of the company’s cash balance important?

A: Cash: Cash is the money which is readily available in the form of currency. Since cash can be easily…

Q: True or false? Using the cash flow statement, as a financial control, is not necessary when your…

A: Step 1   A cash flow assessment is a crucial indicator of a company's health, profitability, and…

Q: Which of the following is not correct about the negative cash flows? O a. You cannot cover your…

A: Cash flow statement: It is a statement which reports the cash inflows and outflows of a business…

Q: Undeniably, profitability  is  the  ultimate  goal  of  companies  and  readers  of  a  company’s…

A: Definition:   Cash flow statements are the statements that determine the inflow and outflow of cash…

Q: Liquidity is the ability of a company to meet its needs for cash in the short and long term. True O…

A: Ratio analysis means where different ratio of various years of years companies has been compared and…

Q: Cash doesn’t earn interest, so why would a company have a positive target cash balance?

A: The corporation have a positive target balance because of cash plays a vigorous part in the…

Q: short answer Some companies go out of business due to lack of cash flow. Even if they may have a…

A: Cash flow statement means the statement which shows the cash flow in or out of business enterprises…

Q: Explain the cost of having too much cash balance or too little cash balance in a business.

A: One of the important functions of a financial manager is to determine the optimal level of cash…

Q: Is the profit that a business makes a reliable indicator of its cash balances? What are the…

A: No, the profit is not the reliable indicator of its cash balances. Cash Flow is the cash collected…

Q: is it possible for a company to expand itself out of existence, and how can this be avoided as a…

A: Introduction : When a company goes out of existence and shuts down its operations, it is stated that…

Q: Accounting statements represent a company’s earnings, but this is not the real cash that a company…

A: The statement that best describes the cash flows: The cash flows that are obtained after subtracting…

Q: which of the following statements regarding free cash flow is true? a.Free cash flow measures the…

A: Free cash flow represents the amount that a company generates after excluding non-cash expenses and…

Q: If a company lowers its cash dividend payment, does that always send a bad signal? If not, provide…

A: Every company receives their capital in the form of equity or debt. Equity is from the shareholders…

Q: How can a company expand itself out of existence, and how can this be avoided as a financial…

A: Introduction: Finance managers are accounting professionals who are concerned with the financial…

Q: Is it possible for a company to show positive cash flows and still be in grave trouble?

A: Positive Cashflows indicates that the company has increased its cash balance from its previous year.…

Q: In the long run, is it more important for a business to havepositive cash flows from its operating…

A: Statement of cash flows: This statement reports all the cash transactions which are responsible for…

Q: I.                                                What are terms of credit? From the viewpoint of a…

A: The following concepts are answered below.

Q: A negative cash flow from operations, a positive cash flow from investing and a positive cash flow…

A: The cash flow is the cash received from the sale of any product and service of the organization.

Q: How can a company’s operations generate a healthy profitand yet produce meager or even negative cash…

A:

Q: A bank is insolvent if Group of answer choices its assets are less than its liabilities. it is…

A: Accounting insolvency happens when the value of a company's debts is more than the value of its…

Q: Explain how a company can be “profit rich, yet cash poor.”

A: Corporation: A corporation is a form of business entity that is incorporated through the state…

Q: Why is interest Expense and Depreciation added back, when calculating Free Cash Flow, if Free Cash…

A: Free cash flow (FCF): It is a fiscal performance computation that estimates the amount of operating…

Q: Why do you think companies use revenue recognition as a primary means for inflating profits?

A: Revenue Recognition: Revenue recognition is the recording of revenues in the books of the company…

Q: Why do you believe businesses rely heavily on revenue recognition to inflate profits

A: Here is the Answer

Q: If a company’s current assets (such as accounts receivableand inventories) are allowed to grow out…

A: Statement of cash flows is a financial statement, which is prepared to identify and analyze the…

Q: Explain "frce cash flows. Why do managers like to retain free cash flows instead of distributing it…

A: Free cash flows : As the name suggests, free cash flows relates to the fund that are leftover to a…

Q: ring and explain its advantages and disadvantages. Why might a bank be interested in a company’s…

A: Gearing : In simple words, gearing refers to the ratio of the company debt to equity. It depicts how…

Q: Why do companies offer a cash discount?

A:

Q: You hear a saying "In order to find out how much cash a company is generating, you have to look at…

A: Net profit of the company means how much profits or income has been earned in a particular period of…

Q: Suppose you are the only owner of a chain of coffee shops near universities. Your current cafés are…

A: Free Cash Flow=Net Income + Non Cash Expenses - Increase in working capital - Capital Expenditure…

Q: is the profit that a business makes a reliable indicator of its cash balance?

A: The profit is not a reliable indicator of the cash balance. This is because there are a number of…

Q: What major advantage does a company that has positive free cash flow have over a  company that has…

A: Free cash flow : It is defined as a financial performance metric which shows how much funds are…

Q: Explain what "financial distress" means. Let's say that a company is in financial difficulties, and…

A: Introduction: Financial Distress is defined as a scenario in which a company's obligations, such as…

Q: EBITDA makes companies with asset-heavy balance sheets look healthier than they may actually be.•…

A: It is abbreviation for Earnings Before Interest, tax , Depreciation, and Amortization. It is used to…

Q: .Which of the following transactions affects the total value of liabilities of a firm? Goods…

A: Solution: Transaction that affect total value of liabilities of a firm, is the transaction that…

Q: What are the trade-offs in financing a company by owner versus non owner financing? If non owner…

A: Financing is the method through which a corporation funds its operations and business activities by…

Q: What are the key reasons for financial managers to maintain cash reserves? How much or how little…

A: Introduction: In order to fulfill immediate and short-term financial requirements, cash reserves…

Q: Is debt good for a company? Why or Why not?

A: In terms of finance, debt can be defined as the borrowed money on which the borrower of the fund is…

Q: the cash method of accounting is generally selected by the very small firm that wants to help its…

A: Under the cash basis of accounting, the revenues and expenses are recorded as and when it is…

Q: How can the company, which is a profitable one, have insufficient cash flows? Explain your answer.

A: Quickclick Media Ltd. announces that their profits in the current year have increased over the…

Cash Book

So, before coming to the topic of cash books, I will let you briefly explain about the cash so that you all can be familiar with the word cash. Cash comes under the category of the current asset which is used as a medium of exchange for all the financial transactions in the firm. Cash is something that is universally accepted as a mode of payment. So, now comes to the topic i.e., cash book.