Business Administration 1220E Lecture Notes - Lecture 1: Risk Assessment, Losing Grip, Current Liability

• School: Western University
• Department: Business Administration
• Course: Business Administration 1220E
• Professor: Scott Lin

Document Summary

This section really depends on the case. Look in the footnotes for: tax rate, interest payment schedules, depreciation on buying fixed assets. Question 1: was cash generated from operations: so look over how many years you have. If 1: yes: engine of business is running. If 1: no: engine of business is not running: this will tell you if the daily operations of the business generate cash. Increasing and decreasing trends help us determine how likely the business will be to succeed. Question 2: is net income a source of cash: add back depreciation, see how much net income is and how large it is in comparison to other sources, uses, and the overall balance. If yes: good, the company is keeping net earnings at the end of the day and able to sustain itself and make profit. If no: not good, the company was not profitable and suffered a loss.