I need help identifying & Classifying Cash Flow Transactions
For each of the transactions, identify:
1. If the transaction is a cash inflow (CI), or a cash outflow (CO), or a non cash flow transaction (NT).
2. Each transaction as an operating activity (OA), an investing activity (IA), or a financing activity (FA), or a non cash flow transaction (NT).
For example, payments to employees would be (CO) and (OA).
1. Proceeds from issuance of debt.
2. Payments for taxes.
3. Purchase of short-term investments.
4. Collections of dividends.
5. Payment of long-term debt.
6. Proceeds from sale of fixed assets (plant and equipment).
7. Payments to suppliers of goods and services.
8. Proceeds from sales of short-term investments.
9. Declaration of a stock split.
10. Collections from customers.
11. Payment of cash dividends.
12. Proceeds from issuance of common or preferred stock.
13. Payments to employees.
14. Purchases of fixed assets (plant and equipment).
15. Collections of interest.
I need help with the Cash Flow Decision-Making
• Scenario 1: Over the past five years, your organization has experienced increasingly negative cash flow, requiring the business to take out a line of credit through a local bank to supplement cash shortfalls. Describe, in detail, the practices you would recommend to improve cash flow. Consider credit policies, collections, product pricing, and accounting processes, for example. Be sure to consider options for operating, financing, and investing activities, in your answer.
• Scenario 2: Over the past three years, your business organization has experienced positive cash flow, in excess of the expectations of company management. Describe, in detail, your recommendations for bringing cash flow in line with management's expectations. Be sure to consider options for operating, financing, and investing activities, in your answer.
