Question

In the most recent fiscal year, General Cereal’s statement of cash flows revealed an increase in the company’s accounts receivable of $129 million.

Required
a. How does an increase in accounts receivable affect a company’s net cash flow from operating activities?
b. If a company’s accounts receivable balance is continually increasing from one year to the next, does that indicate the firm is doing a poor job of managing or collecting its accounts receivable? Explain.



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  • CreatedSeptember 23, 2013
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