Business Finance Report: Working Capital, Profit, Cash Flow Analysis

This business finance report delves into the crucial aspects of working capital management, profit versus cash flow, and their interdependencies. It begins by differentiating between profit and cash flow, emphasizing the importance of each in assessing a company's financial health. The report then explores the concept of working capital, including current assets like receivables and inventory, and current liabilities like payables, and how changes in these elements impact cash flows. It analyzes the operational inefficiencies of Trend Limited, particularly regarding its capital structure, inventory levels, and legal disputes, which have led to poor financial results. The report provides recommendations for improved working capital management, such as optimizing capital structure, maintaining appropriate inventory levels, and resolving legal disputes. Furthermore, it includes a cash budget analysis for Thorne Estates, highlighting areas for improvement in managing cash inflows and outflows. The report aims to provide insights into the intricacies of financial management and offer practical strategies for enhancing business performance.