Comment on senior vice presidents memo in light of cash flow
Course:- Managerial Accounting
Length: word count : 250
Reference No.:- EM131242003

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Managerial Accounting

The Retailing Division of Argon Clothing Inc. provided the following information on its cash flow from operations:
• Net Income $675,000
• Increase in accounts receivable (810,000)
• Increase in inventory (900,000)
• Decrease in accounts payable (135,000)
• Depreciation 150,000
• Cash flow from operating activities $(1,020,000)

The manager of the Retailing Division provided the accompanying memo with this report:

From: Senior Vice President, Retailing Division I am pleased to report that we had earnings of $675,000 over the last period. This resulted in a return on invested capital of 10%, which is near our targets for this division. I have been aggressive in building the revenue volume in the division. As a result, I am happy to report that we have increased the number of new credit card customers as a result of an aggressive marketing campaign. In addition, we have found some excellent merchandise opportunities. Some of our suppliers have made some of their apparel merchandise available at a deep discount. We have purchased as much of these goods as possible in order to improve profitability. I'm also happy to report that our vendor payment problems have improved. We are nearly caught up on our overdue payables balances.

Comment on the senior vice president's memo in light of the cash flow information.

Required to post an initial minimum 250 word response.

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Managerial Accounting) Materials
Compute the quality costs as a percentage of sales by category and in total for each year. Explain why quality costs increased in total and as a percentage of sales in 2005,
Explain why David stopped inspections on the bolts and reassigned inspectors to production and materials handling. What likely effect would David's actions have on the quality
Explain your answers. Given the data in the table and the graph, what type of market structure could this be in the short run? Explain your answers. If the data in Table-1 rep
Using the variable costing income statement, calculate the company's break even point in sales dollars and in units. Can the break even point be calculated easily using the fu
Which ofthe following funds ofChessie City would be consolidated to form the governmental activities column in the City's government-wide tmancial statements? a) Its general f
Calculate a plantwide rate for Lacy Company based on machine hours. What is the bid price of each job using this rate? Calculate activity rates for the four overhead activitie
For each of the balances above would the account normally be a credit or debit balance? Enter the closing journal entries as of December 31st. What would the new balances of e
Refer to the data in Exercise. In Exercise, Back Mountain Industries (BMI) has two divisions: East and West. BMI has a cost of capital of 15%. Selected financial information (