Having been promoted recently, you now have access to your firms monthly financial statements. You notice that

Question:

Having been promoted recently, you now have access to your firm’s monthly financial statements. You notice that revenues are increasing rapidly and that income is at an all-time high. The shows growth in receivables, and have declined. However, the chief financial officer is concerned because the firm’s cash flows from operating activities are decreasing. What are some reasons why a company with a positive net income may fall short of cash from its operating activities? What could be done to improve this situation?

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...