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Company Cash Flow Response

Company Cash Flow Response. Need a masters level 200 word response to the following post.  The response must include 2 scholarly references and Bible references. References utilized by the original poster is below.

Every business needs a steady cash flow to keep the company operational and the “doors open”.  Without cash, the business will not be able to pay its employees, vendors, expenses, or make a profit. Cash and cash flow are the life blood of any business.  Without either, the business will die.

The company has a minimum cash flow.  However, it is not enough to keep the company in business.  Cash is needed now.   To raise the cash needed, the company has some of the following options that they would need to initiate in order to obtain cash needed to keep the business from bankruptcy.

The company can obtain cash from the operations.  The employees and management can take a reduction in pay for a short time with a promise to reimburse lost pay, plus bonuses, when new revolutionary product is released.  The company would also stop any dividend payments to shareholders with promises to pay later.  Plus, inventories would be reduced and purchases held to minimum.

Cash from the assets would be another way of increasing cash flow.  Property, plant equipment, and other assets could be sold. Since the new product that is being manufactured is revolutionary, some of the production equipment may be obsolete and can be sold.  Some of the ideas or concepts for the new product could be sold, if needed.

Since high expectations exist for the new product line, money could be borrowed at lower interest rates from financial institutions. Receiving cash from debt is a quick way of adding funds to the company.  Borrowing money allows the company to spend the funds on what is need to keep the business operational.

Issuing stocks and bonds can also generate cash.  Cash from equity financing is not as risky as borrowing money, but existing shareholders are not excited about reducing their profits and controls (Garcia, 2018).

Since the CFO and management has to keep the shareholders happy with future of the company, the management team would need to address the following areas with the shareholders:

  • Be honest:  The shareholders need to know the issues that the company is facing.   They need to know that cash is needed now.  However, they also need to know about the new product that will change business in its industry and provide huge financial success to the company, as well.  By doing this, some shareholders may invest more.  James 4:17 states, “whoever knows the right thing to do and fails to do it, for him it is sin.”  Shareholders need to know what is happening with their investments.
  • Report regularly: Since the business is going through this crisis, the shareholders should get a report every 3 months or more, if needed, so they can see what management is doing and how the business is progressing.
  • Treat all shareholders the same:  The business needs all the shareholders to navigate this tough time.  All shareholders should have access to same information.  By treating all the shareholders the same, the business will conveys a message of fairness.   All stockholders will appreciate this fairness (Vasconcelos, 2018).


Garcia, M. (2016, October 26). Major Sources of Cash in Corporate Finance. Retrieved from      https://smallbusiness.chron.com/major-sources-cash-corporate-finance-74789.html

Vasconcelos, G. D. (2018, January 11). 3 Easy Steps To Keep Your Investors Happy. Retrieve     from https://www.forbes.com/sites/goncalodevasconcelos/2018/01/11/3-easy-steps-to-keep                                    your-investors-happy/?sh=5ef96f6c68a9

Company Cash Flow Response

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