bv ch 9 q 5

bv ch 9 q 5 - and long term in nature and top support the...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
The chief financial officer of PartsCo has asked you to rerun the forecast of the company’s income statement and balance sheet at a growth rate of 5 percent. If the company generates more cash than it needs, how can the balance sheet be adjusted to handle this? What alternatives exist to handle new cash? In order to rerun the forecast and to which it generates surplus cash, the same can be adjusted in the balance sheet by creating a reserve against the excess cash. This is beneficial for the company as the excess cash generated for the company would come in handy for the paying off liabilities of short
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: and long term in nature and top support the working capital of the business in order to manage the day to day need of the cash. Apart from the above, there are alternatives for adjusting the excessive cash. As we know, when the excess cash will be pooled in, we can actually adjust our reserves and surplus, or treat it as other income in the profit and loss statement. These two measures can be used as a measure to adjust the cash that will be generated in the event of rerunning of the income and balance sheet statements....
View Full Document

This note was uploaded on 02/21/2012 for the course ACT 492 taught by Professor Ngo during the Fall '11 term at Colorado.

Ask a homework question - tutors are online