Introduction to Accounting and finance -- Economics, Finance and Assignment - 6

Introduction to Accounting and finance -- Economics, Finance and Management - Assignment Examplereality this whitethorn not be the case, the company whitethorn face sudden changes in any of these estimates and if any major change occurs, it would definitely affect the estimate and the cash flow forecast presented above. Although the companys cash position improves gradually during the 6 month period according to the cash flow forecast there may be certain areas that may need to be considered. (BusinessLink, 2010)Managers need to be aware of the huge interest that the company has to pay for the overdrafts and the loans taken out by the company, managers should choose surrounded by the high hat possible sources of loan i.e. either the overdraft or the long term loan to manage the company more effectively. (Wilkinghoff, 2009)There is a major difference between the cash earned by a company and its profit. The profits that a company makes are usually based upon accounting techniques and standards and these do not always show the correct picture of a company. Profit is derived by deducting the revenue earned from the cost incurred in gaining those revenue plus other immaterial things such as depreciation, provisions, amortization, goodwill, etc. these figures are fictitious and are not in cash terms i.e. no cash is either received or pay when such things occur. Cash on the other hand gives a better picture of a company which can understandably make the managers ascertain the semiliquid state position of a company and the companys actual earnings with respect to its actual spending. The cash figure clearly tells the managers as to how much liquid cash is available that can be used to invest in the business or can be paid off to its shareholders. (Liquidity, 2010)The balance poll of Hide and Seek Ltd clearly shows the depreciation figure used up in calculating the net worth of the noncurrent assets of the organization. The balance sheet clearly shows that the c ompany has a good working capital of around 3100 but this is not shown in the cash flow forecast for the month of June, which