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Discussion 2: Evaluating Profit and Cash Flows
Any manager’s job is to help the firm maximize its value, which is based on future cash flows. In order to understand future cash flows, informed managers must study their firm’s financial statements.
You studied various profit and cash flow concepts in your accounting course.
With this knowledge, you developed a good feel for how well a company was doing
historically. Your focus in this course is to develop capabilities in
interpretation and use of these concepts. No matter what role you fulfill in
the organization (e.g., marketing analyst, accounting manager, operations
director, etc.), your knowledge of how to use financial data will enable you to
provide good estimates of the impacts of future managerial decisions on
improving the firm’s profitability and cash flow enhancement.
To prepare for this Discussion, think about
your organization or an organization with which you are familiar. Consider the
importance of accounting profit, operating cash flow, net cash flow, and free
cash flow for informing how the organization operates with regard to decision
making. Also, consider how financial markets can affect future cash flows.
Note: If
you are not in the position where you are involved in forecasting cash flows
and profitability, interview either someone in your organization or a
professional outside of your organization who can provide you with this
information. In your post, be sure to identify the position held by this
person.
Post:

Analyze the differences among accounting profit, operating cash
flow, net cash flow, and free cash flow.
Identify the key stakeholders in cash flow planning and profit
estimation processes in the organization, and explain how they are
involved in the processes.
Analyze the impact of accounting profit, operating cash flow,
net cash flow, and free cash flow concepts on decisions in the
organization for which you currently work, one that you would like to work
for in the future, or a small business you hope to start one day.

Bottom of
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Top of
FormDiscussion 2: Evaluating Profit and Cash
FlowsAny manager’s job is to help the firm
maximize its value, which is based on future cash flows. In order to understand
future cash flows, informed managers must study their firm’s financial statements.
You studied various profit and cash flow concepts in your accounting course.
With this knowledge, you developed a good feel for how well a company was doing
historically. Your focus in this course is to develop capabilities in
interpretation and use of these concepts. No matter what role you fulfill in
the organization (e.g., marketing analyst, accounting manager, operations
director, etc.), your knowledge of how to use financial data will enable you to
provide good estimates of the impacts of future managerial decisions on
improving the firm’s profitability and cash flow enhancement.To prepare for this Discussion, think about
your organization or an organization with which you are familiar. Consider the
importance of accounting profit, operating cash flow, net cash flow, and free
cash flow for informing how the organization operates with regard to decision
making. Also, consider how financial markets can affect future cash flows.Note: If
you are not in the position where you are involved in forecasting cash flows
and profitability, interview either someone in your organization or a
professional outside of your organization who can provide you with this
information. In your post, be sure to identify the position held by this
person.Post:Bottom of
Form”