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 company$$s 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.

Why cash can go down even when sales are up$.$

How increases in accounts receivables and inventory balances affect cash flows within a company.

What effect increases or decreases in asset and liability accounts have on cash flow.

How changes in accounts payable balances impact cash flows.

Recommend a possible solution for the company$$s shortage of working capital.