Assignment
1. Compare and contrast the structure of the Balance Sheet and Income Statement.
2. How is each financial statement used to make financial decisions?
3. Why do you think profits and cash flow are not equivalent?
4. Describe the importance of managing cash flow in a business.
5. What are some typical sources and uses of cash for short-term and long-term decision making?
6. Class, consider a company that sells on 60 day terms. As you know, that means that they give their customers 60 days to pay for what they are purchasing. Further suppose that the company can produce a widget for $50, and it sells for $100 on January 29th. If you'll look at the example below. On an accrual basis, the company has $300 in sales and $150 in profits.
Accrual based income statement:
January February March
Sales 100 100 100
Expenses 50 50 50
Profit 50 50 50
On a cash basis, the company has spent $150 over the past ninety days. However, the company has only collected $100 in cash (remember, customers pay every sixty days). So, the company has earned $150 over the quarter. But, it has a cash flow loss of $50.How do you think that's possible?
7. Provide citation and reference to the material(s) you discuss. Describe what you found interesting regarding this topic, and why.
8. Describe how you will apply that learning in your daily life, including your work life.
9. Describe what may be unclear to you, and what you would like to learn.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.