Mini Case Study: Cash Flow At Warf Computers, Inc. Case Studies Example

DDBA: 8140

Accounting Cash Flow
Financial Cash Flows
1. An increase in cash is highlighted in the annual cash flow statement. Reinvestment in the business and cash access provides expansion opportunities for the company. New investors will be attracted to the business because dividends are paid out. Compared to previous years, the business has generated an increased amount of cash and this represents the current cash flow in the company. For 2012, the cash flow was $262,000 which is highlighted in the financial cash flow section.
2. Both types of cash flow, accounting and financial, are equally important to the business. Positive results within the cash flow statements suggest the business’s finances are managed very well . More accurate results are detailed in the financial statements of cash flow. The company’s real cash flow positions are highlighted in the results. The degree of cash flow can be used in order to service long-term debt and financing costs, and this can be seen in the financial statement of cash flow.
3. The plan and decision of expansion within the company are appropriate and will allow the company to be profitable. Cash inflows are also appropriate and positive in this situation. Income and capital are also expanding, as highlighted in the income statements and balance sheets. In terms of revenues, the company is growing and the business also proves to have an appropriate amount of capital in order to increase borrowed funds to further expand the company. Business resources are utilized appropriately, and company management is proving beneficial in terms of future expansion.

References

Jury, T. (2012). Cash Flow Analysis and Forecasting: The Definitive Guide to Understanding and Using Published Cash Flow Data. Hoboken: John Wiley & Sons.
Lee, T. A., & Parker, R. H. (2013). Towards a Theory and Practice of Cash Flow Accounting (RLE Accounting). London: Routledge.
Lütolf-Carroll, C., & Pirnes, A. (2009). From Innovation to Cash Flows: Value Creation by Structuring High Technology Alliances. Hoboken: John Wiley & Sons.