Concept explainers
Ethic Issue
K.M wants to prepare cash flow statement for getting financial help in future from bank. He has worked in the organization for four years. From the last three years, his cash flow is negative, positive, and positive with respect to the 1st, 2nd and 3rd year. But in the fourth year, the inventory cost increased and cash flow from operations went down by 25%. He wants to determine whether the bank will help him in future. He wants to make some changes in the cash flow statement for the last four years. He knows that his cash flow from operations is better from the last four year. He wants a new project to work. He understands the business action so that he can turn the negative cash flow to the positive cash flow from operating activities.
1.
To identify: Two major actions to improve the cash flow from operation.
2.
To identify: Ethics and possible consequences of M’s decision to pursue these actions,
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