Direct and Indirect Cash Flow Models-Free-Samples for Students

Questions: Discuss about the Direct and Indirect Cash Flow Models. Answers: Analysis: According to the calculations and analysis over the cash flow statement of the company, it has been found that the total cash inflow from operating activities of the company is $ 12500 which depict that the company has earned $ 12,500 cash in the year. Further, it has been found that the net cash flow inflow from investing activities of the company is $ -3500 which depict that the company has spent $ 3500 cash in the year which expresses about the expenditure of the company. Lastly, it has been found that total cash inflow from financing activities of the company is $ -2500 which depict that the company has spent $ -2500 cash in the year (Garleanu Pedersen, 2007). Through the analysis, it has been found that net cash inflow of the company is 6500 which depict that the performance and the position of the company is average. The company is required to manage the financing and investing activities to manage the cash flow in the operations of the company (Davies Crawford, 2011). Company could reduce the level of the cash outflow through reducing the extra expenditure of the company and enhancing the cash inflow of the company which would enhance the level of the net cash inflow of the company (Garrison, Noreen, Brewer McGowan, 2010). Thus the senior management of the company is suggested to stop buying the extra equipments for the activities and the operations of the company and it would also help the company to attract more investors towards investment into the company. The liquid position of the company would also be better in regards to the net cash flow. References: Davies, T. Crawford, I., (2011).Business accounting and finance. Pearson. Garleanu, N. B., Pedersen, L. H. (2007).Liquidity and risk management(No. w12887). National Bureau of Economic Research. Garrison, R. H., Noreen, E. W., Brewer, P. C., McGowan, A. (2010). Managerial accounting.Issue