Explain to the director how a firm can be profitable

Discussion:

A member of the board of directors is puzzled by the fact that the firm has had a very profitable year but does not have enough cash to pay its bills on time.

• In your first post, explain to the director how a firm can be profitable, yet not have enough cash to pay its bills and dividends.

• Describe some of the information that could be on the firm's statement of cash flows and use it, along with a demonstration of at least one ratio from the chapter, to explain cash flow and profitability to the board member. As support, develop your own data for items from the firm's cash flows statement.

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Microeconomics: Explain to the director how a firm can be profitable
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