Analyzing the Statement of Cash Flows Assignment

Analyzing the Statement of Cash Flows - Assignment object lessonTherefore, Net Income is the position of a compeverys business based on matching incomes versus spending but cash flow will only reflect actual movement of money without any conside proportionalityns for the accruals (Epstein, 2014).A comparison of the Cash from operating activities to the Net Income for techno in 2008 stands at a ratio of 177,387/242,329= 0.73 and 2009 stands at 24,525/316,354= 0.08. Therefore, Techno had a 73% rate in 2008 and it dropped to 8% in 2009. This is a low quality income cover a great imbalance. The time taken to convert any credits or accruals to cash is reaching an indication of a pending problem that may lead to crippled operations. The first red peg is the declining number of receivable from $-49,704,000 in 2008 to $-288,174,000 in 2009. This deterioration is emphasized by a minimal chasten in inventory over the two years. The Net Income figure is also overrated because the Accrued liabilities have approximately doubled over the two years which puts the company at a delicate position if the creditors get instant payment ((Epstein, 2014)). This position would not be the same in 2008 because the Cash from Operating Activities $177,387,000 was replete to cover the accrued liabilities of $41,079,000.Techno has also engaged in heavy borrowing both in short and Long-term in 2009 to probably support the business from the weak position confirmed by the declining ratio between a 73% rate in 2008 and it dropped to 8% in