Write an essay of 1000 words (excluding references) on the following topic: Discuss the following statement, which was made by the owner of a small business to their accountant: "Given that my business made a profit this year, why is there not enough money in the business bank account for me to withdraw for personal use?"
Can anyone give me some suggestion how should I start this essay and what point do I have to mention? e.g accrual basis, account receivable and inventory??
Thanks
Cash flow would be the thesis. Teachers like charts. Set up hypothetical income and cash-flow statements and discuss them. They can be simplified. These financial statements will serve as your outline for the paper.
Cash Flow is the issue alright. High growth = Low Cash but this is not always such a bad thing if you have a plan or compensate somehow. Increased cash generation is the goal here? Good debt management, bargain for interest rates, search for a new partner, asset disposal, tax avenues, and what is the Accounts Receivable turnover like?
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