Question 1: Why is cash flow considered the most honest statement? Tell in your own words how a cash flow statement is created? Using Accounts Payable as an example, show how this account going up or down from year to year can affect cash flow.
Question 2: If you were looking at an existing small business to acquire, once you received this small business's current and past year's financial statements, what would be your next few steps?
Question 3: How do you continue or restart the growth cycle when your small business has already reached a plateau and began to decline? Provide an example of a business that was on the decline and made an adjustment to continue growth. What caused the company to go into decline in the first place and what adjustment did that company make to avoid further decline?
Question 4: List the major categories of ratios (you can find these in texts or via a internet search), then, using your own company, or a company for which you have worked in the past, pick what you believe is the one most important ratio (for said company) from each category. State the reason why these ratios are important for your chosen company.