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Delicious77 [7]
3 years ago
5

For those brave enough to act effectively now to stabilise and protect your business and maintain liquidity, opportunity will co

me." Explain whether the Statement of Cash Flows is able to illustrate the ‘liquidity' of an entity to its users and provide ONE recommendation how companies can maintain liquidity during this pandemic.
Business
1 answer:
FrozenT [24]3 years ago
5 0

Answer:

1. Yes. Cash flows are able to illustrate liquidity.

2. Recommendations

a. Reducing levels of Inventory.

b. Negotiating Longer credit settlement period with suppliers.

Explanation:

One of the uses of a Cash flow Statement is its use in negotiating loans with bank and other lenders. Of interest to these parties is the liquidity of the entity.

Liquidity is the ability of an entity to honor its short-term obligations using its current assets. Liquidity is reflected in the Cash flow from Operating Activities of the Cash flow Statement.

<u>Recommendation</u>

Companies can maintain liquidity through reducing levels of inventory. Inventory ties up cash. Negotiating longer credit settlement period with suppliers can also increase liquidity.

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During its 1st month of business, Noodlecake's cash increased by receiving $5,000 from issuing common stock to its owners, borro
Anestetic [448]

Answer:

Noodlecake

On its statement of cash flows, Cash Provided by Operating Activities equals $__1,000____ Cash from Investing Activities equals $__(3,000)______ Cash from Financing Activities equals $_7,000______  and the Change in Cash equals $_5,000______ Be sure to use parentheses around the amount if it is a cash outflow, e.g. $(1,000)

Explanation:

a) Data and Calculations:

Financing activities:

Common stock $5,000

Bank loan            2,000

Net cash           $7,000

Operating activities:

Cash from customer $3,000

Cash to employees   (2,000)

Net cash                    $1,000

Investing activities:

Equipment     ($3,000)

Net cash from cash flows = $5,000

The net cash from cash flows or the change in cash flows is the summation of the changes in the operating, investing, and financing activities of Noodlecake during the period under review.  It shows by how much the cash has increased or decreased when compared to the beginning balance, which can be zero as in this case.

3 0
3 years ago
Sauer Milk Inc. wants to determine the minimum cost of capital point for the firm. Assume it is considering the following financ
weqwewe [10]

Answer:

Plan A = 8.55%

Plan A =8.57%

Plan A =7.9%

Plan A =6.58%

Explanation:

The weighted average cost of capital can be computed by multiplying the Cost of capital (after tax) with the weights. The weighted average cost for four plans are as follows

WACC = Cost of capital x Weights

PLAN A

                                Weights      Cost of capital      WACC

Debt                         3.0 %                    15 %                0.45%    

Preferred stock       6.0                        10%                0.6%

Common equity      10.0                      75%               7.5%

WACC                                                                          8.55%

PLAN B

                                Weights      Cost of capital      WACC

Debt                         3.2 %                  25%                0.8%    

Preferred stock       6.2                      10%                0.62%

Common equity      11.0                      65%               7.15%

WACC                                                                         8.57%

PLAN C

                                Weights      Cost of capital      WACC

Debt                          4.0 %                   35 %                1.4%    

Preferred stock        6.7                        10%                0.67%

Common equity       10.6                      55%               5.83%

WACC                                                                          7.90%

PLAN D

                                Weights      Cost of capital      WACC

Debt                         7.0 %                   45 %                3.15%    

Preferred stock       7.6                       10%                 0.76%

Common equity       12.6                     45%                5.67%

WACC                                                                          6.58%

4 0
3 years ago
Strike, a clothing manufacturer from Minnesota, offered to sell Bailey, the owner of a clothing store in Colorado, one thousand
Drupady [299]

Answer:

There was no contract since there was no mutual agreement on the shipping company.

Explanation:

For a contract to be enforceable, it is necessary to have proper offer and acceptance by the two parties. In this case, Strike made an offer and Bailey accepted the stated price but added that the shipping has to be done by Yellow Express Truck Line and not Dependable Truck. Since there was no agreement reached on the shipping company by both the parties, the contract isn't enforceable.

6 0
3 years ago
When an individual who is insured under a disability income policy cannot perform one or more of his or her regular job duties,
sergejj [24]

When a person insured under a disability income insurance policy cannot, for limited period of time, perform all functions of his or her regular job duties, this is known as <u>Residual disability or Partial disability.</u>

"Residual disability" is the inability to do one or more job duties or to execute them as regularly as previously, along with a loss of pre-disability income.

Residual disability policies compensate based on lost income. These insurance offer benefits if you can work part-time and aren't entirely disabled. The benefit is dependent on your part-time income compared to your full-time salary.

Depending on the policy, a person receiving residual disability payments may receive a reduced benefit or none at all if her monthly income exceeds a specific proportion of pre-disability income. Some programs require entire disability before granting residual disability benefits. You can buy a residual policy as a stand-alone income replacement policy or as a rider on a total disability policy. Income replacement is cheaper than total disability. Partial and residual disability insurance are comparable. Both pay benefits if you can accomplish some job requirements.

To know more about Partial/Residual disability refer to:

brainly.com/question/12272454

#SPJ4

8 0
1 year ago
_______ is the phenomenon of the shifting of individual management styles to become more similar to one another.
Minchanka [31]

Answer:

Convergence

Explanation:

Convergence meaning that the two different entities are coming together. It is also defined as the tendency of the group members to become more alike. It is also known as the company culture, in the sense, that the people who work there, tend to have the similar characteristics.

Therefore, the convergence is the phenomenon which states the shifting of the styles of the individual management in order to become more similar to one another.

3 0
3 years ago
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