Use the statement of cash flows to support managementdecision-making.
The Artisan Shutter Company, like many companies thatrelied on the construction industry, took a financial hit whenâhousing bubbleâ burst in late 2007. Lenders were making subprimemortgage loans to borrowers who really couldnât afford theprinciple and interest (P&I) payments and subsequentlydefaulted on their loans. This was followed, in 2008, by thecollapse of Lehman Brothers, a global bank, which almost broughtdown the worldâs financing system. Due to tighter bankingregulations, many individuals and companies found it extremelychallenging to secure loans. Despite the governmentâs decision toimplement quantitative easing as a means of stimulating theeconomy, unemployment, personal and corporate bankruptciesincreased. Looking at The Artisan Shutter Company and imagine thatyou were a member of the leadership team and noticed that the cashflow position of the company was being severely weakened by whateconomists perceived to be a pro-longer economic downturn. Theowners are understandably concerned about the long-term viabilityof the firm. Prepare a position paper that outlines strategies toimprove cash position of the company as it tries to âweather thestormâ and experiences a normalizing of the economy. In order toformulate your position paper, you may want to carefully considerthe problem (reflecting back to 2008 recession), collect relevantdata and information, critically evaluate the alternatives, anddocument your recommendations using sound arguments that are wellsupported, properly vetted, and logically presented. It isimportant that management carefully consider any potential ethicalimplications associated with their stated position. If there areany potential ethical concerns associated with your position, theyshould be identified and discussed in the position paper.
Use the statement of cash flows to support managementdecision-making.
The Artisan Shutter Company, like many companies thatrelied on the construction industry, took a financial hit whenâhousing bubbleâ burst in late 2007. Lenders were making subprimemortgage loans to borrowers who really couldnât afford theprinciple and interest (P&I) payments and subsequentlydefaulted on their loans. This was followed, in 2008, by thecollapse of Lehman Brothers, a global bank, which almost broughtdown the worldâs financing system. Due to tighter bankingregulations, many individuals and companies found it extremelychallenging to secure loans. Despite the governmentâs decision toimplement quantitative easing as a means of stimulating theeconomy, unemployment, personal and corporate bankruptciesincreased. Looking at The Artisan Shutter Company and imagine thatyou were a member of the leadership team and noticed that the cashflow position of the company was being severely weakened by whateconomists perceived to be a pro-longer economic downturn. Theowners are understandably concerned about the long-term viabilityof the firm. Prepare a position paper that outlines strategies toimprove cash position of the company as it tries to âweather thestormâ and experiences a normalizing of the economy. In order toformulate your position paper, you may want to carefully considerthe problem (reflecting back to 2008 recession), collect relevantdata and information, critically evaluate the alternatives, anddocument your recommendations using sound arguments that are wellsupported, properly vetted, and logically presented. It isimportant that management carefully consider any potential ethicalimplications associated with their stated position. If there areany potential ethical concerns associated with your position, theyshould be identified and discussed in the position paper.
