Accounting Discussion Cash Flow Analysis

Introduction: In this unit you are being exposed to the accounting aspect of a business operation. In general, the financial statements provide information about the operations of the business. The analysis of these statements help to guide managers to see how the business is performing relative to previous time frames as well as other competitors in the industry. Be sure to use the NLU library for your research and cite everything you reference (including the assigned article) in APA citation format at the end of your initial post. Note: To locate the article navigate to the NLU Library, click find articles, select Business & Management: EBSCOhost Business & Management Databases. then search for the article to read it. You are required to go to the NLU library and search for additional research references outside your assigned reading. For Unit 4 you should research the topic of Cash Flow. As a note, you may want to include the references from your other readings, textbook, videos, etc.) For this assignment you are being provided the Balance sheet and the Income statements for a business over a 2-year period.

Before you begin this assignment, it is highly recommended you READ: Understanding Financial Ratios.pdf.

Part 1: Utilizing the financial statements provided
1. Calculate and interpret the working capital. Be sure to provide details and examples to support your work.

Explain what working capital is and why it is important for a firm.
Calculate the working capital for 2 years.
What can you say about the companies working capital?
Why is it important for an organization to have a good cash flow as it relates to working capital? Provide some examples to support your work.
2. Calculate and interpret the Accounts Receivable Turnover Ratio. Be sure to provide details and examples to support your work. .

Explain what Accounts Receivable turnover ratio is and why it is important for a firm.
Calculate the Accounts Receivable turnover ratio for 2 years. What can you say about the companies Accounts Receivable turnover ratio?
What can you say about the company’s Accounts Receivable turnover ratio relative to the industry average?
Why is it important for an organization to have a good cash flow as it relates to Accounts Receivable turnover ratio? Provide some examples to support your work.
3. Calculate and interpret the Inventory ratio. Be sure to provide details and examples to support your work.

Explain what inventory turnover ratio is and why it is important for a firm.
Calculate the inventory turnover ratio for 2 years.
What can you say about the company’s inventory turnover ratio?
What can you say about the company’s inventory ratio relative to the industry average?
Why is it important for an organization to have a good cash flow as it relates to inventory turnover ratio? Provide some examples to support your work.
4. What is the significance of these ratios with regard to your CapsimCore operations? Why? Provide support to your answer.