Atlantic Service Company was established in Moncton, New Brunswick, five years ago to provide services to the home construction industry. It has been very successful, with assets, sales, and profits increasing each year. How- ever, Atlantic is experiencing serious cash shortages and is in danger of going into bankruptcy, because it cannot pay its suppliers and already has a very substantial overdraft at its bank. The president has asked you to analyze the statement of cash flows for the years 2016 and 2015, which appears below.
Write a memo that:
a. Explains what appears to be causing the cash shortage
b. Recommends a plan to save the company from bankruptcy.

  • CreatedJune 11, 2015
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