The cash flow at Warf Computers, Inc. is as follows:
Operations
Net Income $896
Depreciation $191
Deferred Taxes $13
Changes in assets and liabilities
Accounts receivables -$37
Inventories -$17
Accounts payable $20
Accrued expenses -$118
Other -$11
Total cash flow from operations $937
Investing Activities
Acquisition of fixed assets -$786
Sale of fixes Assets $139
Total cash from investing activities -$647
Financing Activities
Retirement of long term debt -$98
Proceeds from long term debt sales $118
Change in notes payable $5
Dividends -$212
Repurchase of stock -$40
Proceeds from new stock issue $11
Total cash from financing activities -$216
Change in cash $39
Description of Cash Flow for Warf Computers, Inc.
Overall company cash flows is positive. The company has positive outcome in regards to its earnings. The company has the monetary means to invest in the future, and was able to return money to its shareholders and pay its creditors/lenders. The company appears as it will be able to cover payroll and immediate expenses. It is appealing to potential lenders, investors, employees and shareholders. Cash Flow Statement that Accurately Describes the Cash Flow at the Company According to Jaffe, et al. (2012), “perhaps the most important item that can be extracted from financial statement is the actual cash flow of a firm” (p. 29).
The Dissertation on Related Literature to the Cash Flow Management
The role of cash flow information in discriminating between bankrupt and non-bankrupt companies remains a contentious issue. In a number of literature reviews on bankruptcy prediction (e. g. Zavgren, 1983; Jones, 1987; Neill et al. 1991; Watson, 1996) the common view is that cash flow information does not contain significant incremental information content over accrual information in ...
It seems there are several methods of manipulating data to increase operating cash in order to increase the value of the firm and its perceived ability to produce more cash flow. An accurate statement that describes the cash flow at the company is “cash flow is not the same as net working capital” (Jaffe, et al. 2012 p. 29).
Cash flow utilizes both inventory and cash as current assets. In regards to Warf Computer’s, Inc., financial decisions within the company provides a positive insight to the management of the company. Expansion Plans of Nick Warf
The expansion plans incorporating virtual keyboards, a high level of technology, seems to be a promising idea. The company was able to provide a return to their shareholders. Reallocation of the company cash flow may have been put to better use in regards to Mr. Warf’s expansion plans. Conclusion
The financial statement of cash flows for Warf Computers, Inc. indicates that the company is moving in a positive direction in regards to management of its resources. This document is important due to being “statement that tracks all the money coming into your business and all the money flowing out from it” (Carabelli 2013, p. 1).
In reviewing the balance sheet and income statement for this company, it has a positive cash flow and is able to provide a return to stockholders and lenders.
