Can a company have a high net income but not enough cash to pay its bills? Explain your response. Give me one scenario or example to support your response.
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- If a company is worried about having enough cash to pay interest to their bondholders, rent to their landlords and wages to their employees. they are having:a. Solvency issuesb. Liquidity issuesc. Duration matching issuesWhich of the following have high return and low Liquidity? a. demand deposit account b. saving account c. NOW account d. Checking accountWith respect to disbursements, a company can manage their cash more efficiently by __________. a.) paying with cash b.) using lockbox banking c.) minimizing float time d. making use of credit
- Hi, I want to ask about the Cash Over and Short Account. Why and how does this account exist? Where can the surpluses or shortages coming from?A. What is the incremental cash flows from switching credit policies? B. What is the cost of switching? C. What is your recommendation? D. What is the break-even sales increase? Interpret.Explain how each of the following factors would probably affect a firm’s target cash balance if all other factors were held constant. d. The firm arranges to use an overdraft system for its checking account.
- What does a firm need to do to improve liquidity? Extend credit terms to customers in order to gain more sales Stock up on inventory in order to never run out of stock Pay all bills and payables when due Speed up collection of accounts receivable from customers3 Why might smaller companies prefer to use techniques such as cash payback and accounting rate of return over discounted cash flow techniques? This is to be posted on Discussion Forum, So please write it in you own words.Explain how commercial bank mange it balance sheet to maximize its profit without affecting the liquidity.
- What is a question that should be asked about accounts payable when forecasting? a.) What are the costs associated with storing goods? b.) How much bad debt should be anticipated? c.) How much cash is needed on hand to meet current liabilities? d.) How quickly can we replenish goods?When a company has a generous credit policy, cash is tied up in receivables and the company must finance its expansion or the payment of its bills through increased borrowing. What label is given to this cost of selling on credit? Carrying cost Sales returns and allowances cost Bookkeeping cost Bad debit costHow can I calculate using a financial indicator, which of the companies has the greatest possibility of obtaining more money borrowed from a bank?