Accounts Receivable Case Studies Samples For Students

Question 1: Why Cartwright Lumber Company needs cash

Despite the profitability of Cartwright Lumber Company, it still faces cash flow challenges. The financial statements indicate that the company has a low balance in its cash account. Profitability does not necessarily mean the firm has a stable cash flow. The income statements indicate that Cartwright Lumber has been profitable in each of the years from 2001. The net income has increased from $31,000 in 2001 to $44,000 in 2003. However, its cash balance has declined in each of the years. Large sales and profitability do not automatically translate into cash flows. The company has large balances ...

Analysis of the negotiation

Following between the co – owners of the Hackerstar Company, I was appointed the chief attorney representing one of the owners by the name Alan Hacker. This negotiation is taking place so that the two can come to an agreement that will see Litigation ruled out, Hackerstar receive royalties that Star is claiming and Hacker gets to move on with his innovations with another group of investors.

The peripheral elements that may have an impact on the negotiation include sharing of HackerStar’s assets, possibility that Star may have a personal grudge with Hacker. Star may be out to sue Hacker ...

Financial Accounting

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Computations of the 2014 liquidity ratios for Coca-Cola and PepsiCo

The computations of the 2014 liquidity ratios for Coca-Cola and PepsiCo, including the current ratio, accounts receivable turnover, average collection period, inventory turnover, days in inventory and current cash debt coverage, are provided below.

The 2014 liquidity ratios for Coca-Cola and PepsiCo

According to the above-performed analysis, PepsiCo had better liquidity ratios in 2014 comparing to Coca-Cola’s financial performance in this regard.
Thus, PepsiCo’s liquidity ratios, such as the current ratio, inventory turnover and current cash debt coverage, are significantly larger than Coca-Cola’s similar financial figures.
As a result, PepsiCo’s average collection period, as well as the ...

Profit Wheel Analysis

Cash Wheel
This part of the profit wheel is composed of the operating cash, inventory, accounts receivable, and sales. The main question therefore is whether the company has enough inventories, accounts receivable, operating cash, and sales to switch to a private brand of coffee. The answer to which would be a yes. In terms of cash, the company posted an initial cash of 1.121 Billion ITL at the start of the year; the composition of private coffee sales on total sales is continuously increasing month on month and the same goes for the account receivables as well.

Profit Wheel

Sales, investments ...

Introduction

The AirSec Company emerged as a collective contribution of three graduate engineers who extensively researched and established this particular technology, to combine drones (popularly referred to as UAV or Unmanned Aerial Vehicles) with security systems of enhanced technology. These graduate engineers were able to attain this by use of a minute drone, properly equipped with cameras of very high definitions. The cameras could use particular night observing infra imageries and also the normal light imageries. After periods of development, present time Wi-Fi links were successfully introduced to numerous receivers such as cellular phones.

The core aim of AirSec Limited ...

Clarkson Lumber is a young company that needs many sources of finance to keep running its operations. However, recently a bank has denied Clarkson Lumber a financing of $750,000. This is a big loss for the company. The company is highly geared with the leverage of $1 amount of debt for every $1 of equity invested. The current ratio of the company is also in a bad condition signifying working capital difficulties. For every $1 in current liability, the company has only $0.6 in current assets. This situation is very alarming. In future, if the creditors of the company ask Clarkson Lumber to ...