Organization :Amit Traditional Hot Beverages (Fictitious)
Industry : Food and Beverages Industry
Countries : India
Cash Flow Classification and Analysis for Decision Making
Amit had successfully run his café business for three months and was looking to improve sales performance. He also wanted to leverage on other alternative sources of revenue generation. He wanted to spend more on advertising and marketing activities to improve total sales. But before going ahead with his decision, Amit wanted to determine the cash balance available with him. The present case study can be helpful in understanding: the concept of cash flows, purpose of cash flow analysis, the purpose of preparing a cash flow statement for analyzing cash flows from different activities.
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The concepts of cash flows and cash equivalents.
Meaning and scope of cash flows from Operating Activities.
Meaning and scope of cash flows from Investing Activities.
Meaning and scope of cash flows from Financing Activities.
Amit had successfully run his café business “Amit Traditional Hot Beverages (ATHB)” for three months. It was the start of a new financial year (2019-20) and he was doing short-term planning for another three months. He had a fixed deposit account that he had maintained for ATHB and he withdrew the money from that and placed it in the current account (The total amount withdrawn included interest of Rs.5,000). In addition, he also introduced another Rs. 500,000 into the business and placed that amount in government bonds that were encashable to their full value at any point of time..