The Best Practices To Maintain Healthy Cash Flow


Cash flow is critical to any business. This activity helps you examine factors affecting proper cash flow and the best practices related to them. For this discussion, review your notes about cash flow and the cash flow statement, and consider the related cash flow aspects, such as cash flow risks, burn rate, and working capital.

Write a 300-word response to the following question(s)/prompt(s), include at least one APA-formatted citation/reference to a source.

Respond to the following questions, and then post your perspective and understanding as to why cash flow is important to the net worth of a company for long-term sustainability and growth?
Explore the following questions:

What are the best practices to maintain healthy cash flow?

What cash flow risks need to be considered?

How much working capital is enough?

When Mary invests her personal money into her new company, what will happen to her company’s Cash account?

When a company purchases inventory (for resale), what will happen to its Cash account?

What happens to the company’s Cash account if it borrows money from the bank by signing a note payable?

What is the effect on its Cash account when a company pays some of its Accounts Payable?

What happens to a company’s Cash account if it declares a dividend on its shares of stock?

If a company’s Account Payable decreased, what is the likely effect this will have on Cash?

If the asset account Land increased, what’s the likely effect on Cash?


Statement of Cash Flows (2018) Corporate Finance Institute.

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