Cash Flow Analysis: Performance Review and Recommendations Report

This report analyzes the cash flow of a company, examining its operating, investing, and financing activities. The analysis reveals a net cash inflow of $6500, indicating an average performance. The report highlights the need for improved management of financing and investing activities to optimize cash flow. Recommendations include reducing unnecessary expenditures and attracting more investors. The report references key financial texts to support its findings. The overall focus is on evaluating the company's financial health and offering actionable insights to improve its financial standing. The report also assesses the impact of cash flow on the company's liquid position and suggests strategies to improve it.

Running Head: Principle of Accounting
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Project Head: Principle of accounting

Principle of Accounting
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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.

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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. Issues