The statement of cash flows is designed to give additional information on the flow of funds within an entity. The concept of expense does not necessarily give decision makers information on funds flow. The statement of cash flows is designed to give information on the flow of funds within an entity, and to summarize the sources that make funds available and the uses for those funds during a given period. In general, there are three activities that generate or use cash flows for an organization: operating activities; investing activities; and financing activities. A statement of cash flows can be thought of simply as a statement that explains the sources for changes in the cash accounts during the year. The amount of cash flow generated from operating activities can be thought as the amount of excess of revenues over expenses subject to several adjustments, the first of which is for expenses that did not involve an actual outlay of cash. The biggest items here are depreciation and provision for bad debts. Provision for bad debts is added back because the expense did not involve an outlay of cash, merely a write$-$off of a receivable. Your HMO is experiencing a critical shortage of funds. Using the statement of cash flows as a framework for explanation, prepare a memorandum with specific recommendations on how the management might attempt to reduce the need for additional funds.