Question

JBS Inc. recently reported net income of $4,750 and depreciation of $885. How much was its...

JBS Inc. recently reported net income of $4,750 and depreciation of $885. How much was its net cash flow, assuming it had no amortization expense and sold none of its fixed assets? How does net cash flow affect managerial decision making?

Please explain briefly.

Thank you.

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Homework Answers

Answer #1

Solution:-

To Calculate Net Cash Flow -

Net cash Flow = Net Income + Depreciation

Net Cash flow = $4,750 + $885

Net cash flow = $5,635

How does net cash flow affect managerial decision making?-

Cash flow is the analysis of the company's perforemance. Cash flow helps the management in decision making that where the Management invest the cash by which additional fund are generate by invested amount.

Cash flow makes the company liquidity better. It helps to create base as a solid requisite for credit.

It helps to find out the future cash deficit in cash and help them to make decision before this problem occurs.

Cash flow analysis is helpul in knowing the liquidity position of the company by which users attract after seeing the liquidity position of the company.

Thanks

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