HSM 340 Week 6 and Week 7 discussions (all graded A)

HSM 340 Week 6 and Week 7 discussions Week 6 Discussion 1 Businesses maintain cash and investments for four primary purposes: 1. Short-term working capital needs 2. Capital investment needs 3. Contingencies 4. Supplement operating earnings Uses of cash include • Payments to employees • Payments to suppliers • Payments to lenders for interest and principal • Purchase of fixed assets • Investments Or SOURCES AND USES OF CASH In its most basic form, a cash budget is a statement that projects how the firm’s cash balance position changes between two points in time. Changes to cash position are categorized as either sources of cash flow (sometimes called “receipts”) or uses of cash flow (sometimes called “disbursements”). Sources of cash include • Collection of accounts receivable • Cash sales • Investment income • Sale of assets • Financings • Capital contributions