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Unformatted text preview: sales used by companies that allow them to manage reported income and operational cash flow growth. Companies can, within limits, report some items that may be nonrecurring as operational items rather than extraordinary items. For example, Texas Instruments used a gain on a sale to reduce its sales and general administration expense. This boosted operating income. 2. How could outsourcing impact growth in cash flow? Give an example of how outsourcing affected growth in cash flow. Companies that do all or most of their own manufacturing require higher levels of investments in assets. If you compare their results to companies that outsource manufacturing, firms that do their own manufacturing chew up more cash flows. The level of cash flows will be higher for an outsourcing firm. While level of cash flows will be higher for the outsourcing firm, potential issues of risk such as quality control could be different....
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This note was uploaded on 09/13/2011 for the course FIN 6301 taught by Professor El-asmawanti during the Fall '09 term at University of Texas at Dallas, Richardson.
- Fall '09