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Chapter2_M01_Cash Flow Case Study - Input

TechSpark Solutions, a small tech startup, received a $50,000 investment and is analyzing its cash flow from operating, investing, and financing activities. The case study includes calculations for net cash flow in each category and emphasizes the importance of cash flow for business survival and growth. Students are tasked with discussing strategies for improving cash flow and predicting the company's future based on current financial activities.

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1 views

Chapter2_M01_Cash Flow Case Study - Input

TechSpark Solutions, a small tech startup, received a $50,000 investment and is analyzing its cash flow from operating, investing, and financing activities. The case study includes calculations for net cash flow in each category and emphasizes the importance of cash flow for business survival and growth. Students are tasked with discussing strategies for improving cash flow and predicting the company's future based on current financial activities.

Uploaded by

prokchorbaz
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Chapter 2 – Module 1 –

Case Study about Cash Flow Analysis:


TechSpark Solutions
Background: TechSpark Solutions is a small tech startup that has been developing a new software
product. The company recently received a $50,000 investment, and they want to use it wisely to
cover expenses and grow their business. They have three main activities that involve cash inflows and
outflows over a month:

1. Operating Activities (e.g., sales and paying salaries):

o Cash received from customers: $15,000

o Salaries paid to employees: $25,000

2. Investing Activities (e.g., buying equipment):

o Purchased new laptops for employees: $5,000

3. Financing Activities (e.g., paying loans or attracting new investors):

o Paid interest on a small business loan: $1,000

Tasks for Students:

1. Calculate the Net Cash Flow for each type of activity:

o Operating Activities: What is the net cash flow?

o Investing Activities: What is the net cash flow?

o Financing Activities: What is the net cash flow?

2. Calculate the Total Cash Flow:

o Add up the net cash flows from operating, investing, and financing activities to find
out if TechSpark Solutions is generating or consuming cash this month.

Questions for Class Discussion:

1. Why is Cash Flow Important?

o Discuss why knowing the cash flow of each activity is important for a company, even
if they seem profitable on paper.

2. Survival of TechSpark Solutions:

o If TechSpark continues to have this kind of cash flow every month, what do you think
will happen to the company in 6 months? Why?

3. Improving Cash Flow:

o What strategies could TechSpark use to improve their cash flow situation? Should
they focus on increasing sales, reducing costs, or both?

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