Eat at my restaurant cash flow Essay Example | Topics and Well Written Essays - 750 words

Eat at my restaurant capital flow - Essay ExampleNet income values are a good power of the business progress. Obtained via accrual accounting, salary income value shows the exonerate profits or losses that the company achieves in the specified period. Moreover, net income values can easily be obtained from the income statement and represents the difference between each accounting revenues both direct and indirect and all accounting expenses. As matter of fact, many investors consider on net income figures to make investment decisions. Perceptibly, dividends are always proportional to net income. Therefore, if the leaning of net income figure is increasing then the company can attracts investors due to expected rise of the shares. The implication is that, the flying can easily access capital, and to be precise equity, hence stands a better chance to expand. However, advantageousness and insolvency is not always guaranteed by positive net income figures. Note that, allow net i ncome values could be as a result of a high expenses figure which might have originated from high dispraise of assets. If the value of these expenses is one time, or rather does not influence s operational saes, then the net income figure falsely predicts the firms fiscal status. Its to the opinion of many scholars that cash dictates financial position and thus, cash flow predicts long term profitability. Literary a positive net cash flow from operating activities implies that the business is collecting more cash that its spending and positive trend predicts a bright future.