cash flow work
Question 1 (30%)
Quick questions
1. Please define what are the two main purposes of financial ratios. Explain who are the main users of this financial information.
2. Please explain the difference between the sources and use of cash. Give at least two examples of each.
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3. Please explain the functions of a cash budget by mentioning three of them.
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4. Discuss three types of financial ratio categories. Explain what is the information extracted from them.
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5. Why are cash equivalents included on the statement of cash flows?
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Cash budget preparation
1- Prepare a cash budget for a company for April, May and June.
Question 3
Question 4
Acer company balance sheet lists the following items:
Cash: $10,000
Cash equivalents: $20,000
Accounts receivable: $5,000
Inventory: $30,000
Property & equipment: $50,000
Accounts payable: $12,000
Short-term debt: $10,000
Long-term debt: $20,000
1- Please calculate the current ratio of the company. Offer your expert opinion the ratio and what it says about how liquidity is managed.
2- Please calculate the cash ratio. How would you explain it ?