Question 5

Explain why it is possible for a company to report a net profit after tax and have less cash in the bank at the end of the year than at the beginning of the year. Is it possible

for the reverse to happen i.e. report a net loss but have more cash in the bank at the end of the year than at the beginning of the year? Give one example for each scenario

to illustrate your answer.

Word Limit: 250 words