Question

sales revenue $ 136,200 expenses cost of goods sold 55,000 depreciation expense 18,500 salaries expense 31,000 rent expense 10,300 insurance expense 5,100 interest expense 4,900 utilities expense 4,100 net income $ 7,300

Answer 1

The operating activities generated $25,000 in net cash.

A company's liquidity position is represented by net cash. It is determined by subtracting the current liabilities from the cash balance shown on the financial accounts of the company at the end of a specific period, and analysts and investors use it to gauge the firm's financial and liquidity status.

It differs from net cash flow, which is determined as the cash the company produced during a specific time period after paying all of its operational, financial, and capital obligations, including shareholder dividends.

The company's cash plus marketable investments less its total debt is another way to calculate net cash (short-term borrowings plus long-term borrowings). The company will be able to honor its borrowings if they become immediately due if this figure is positive, which indicates that the company is in good financial condition. If this number is negative, on the other hand, it indicates that the business does not have enough cash on hand to pay off all of its borrowings right away.

Learn more about net cash here

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