Part 1: Business Letter

In this part of the assessment, you will be assessed based on the following Outcome:

GEL-1.02: Demonstrate college-level communication through the composition of original materials in Standard English.

You will prepare a business letter to share your advice with the CFO of a company. You will explain complex financial data and discuss the cause and effect of select accounting transactions on cash balances.

Read the fictional scenario and respond to the checklist items.

Scenario:

The chief financial officer (CFO), Karl Richland, of Semtell Company in Cincinnati, Ohio, is asking for your advice. The CFO explains sales are increasing but there is a constant matter of not having enough cash to meet payroll or pay vendors within 30 days.

Checklist: Using the information contained in the companys cash flow statement, prepare an informational business letter to the CFO to the CFO to explain the seven items listed below. Note: there is no actual Cash Flow Statement for you look at but you must write the letter based on your understanding of the cash flow statement and what represents sources and uses of cash.

1. Why cash can go down even when sales are up.
2. How increases in accounts receivables and inventory balances affect cash flows within a company.
3. What effect increases or decreases in asset and liability accounts have on cash flow.
4. How changes in accounts payable balances impact cash flows.
5. Recommend a possible solution for the companys shortage of working capital.
6. Your informational business letter should:

• Use the accepted business letter format and example as provided above.
• Utilize Standard English and use correct spelling and grammar.
• Provide a clearly established and sustained viewpoint and purpose.
• The writing should be well ordered, logical, and unified, as well as original and insightful.
• Include at least one scholarly, high-quality, and current Purdue Global Library source and/or your textbook.