Question
You have been recently promoted and now have access to the firm's monthly financial statements. Business is good. Revenues are increasing rapidly and income is
You have been recently promoted and now have access to the firm's monthly financial statements. Business is good. Revenues are increasing rapidly and income is at an all- time high. The balance sheet shows growth in receivables and accounts payable have declined. However, the chief financial officer is concerned about the firm's cash flows from operating activities because they are decreasing.What are some reasons why a company with a positive net income may fall short of cash from its operating activities? What can be done to improve this situation? Use accounting terms and concepts from the various chapters to support your answer .
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