Cash Flow Statement Coursework Example | Topics and Well Written Essays - 750 words

Cash Flow Statement - Coursework Example On the other hand, UKFI has adopted debtors’ management approach by adopting a credit policy that is attractive to its customers. In the year 2011, UKFI registered an increase in its trade receivables of 193,000 pounds and in 2012 a decrease of 66,000 pounds indicating that it was able to receive more funds from its debtors. On the trade payables, there was an increase of 175,000 pounds indicated that it paid less of its debts. RBS has registered a steady increase in its receivables over the two years implying that its debtors have been prompt in paying their debts. However it has registered a decrease in its payables meaning that it has increased that amount owed to its creditors. This is considered to be more risky to the firm due to its inability to maintain a low creditor’s ratio. Both firms have also adopted short term financing methods such as factoring in addition to the already existing methods to ensure that the firm does not fail to meet its short term financial obligations by relying solely on the internally generated funds. The short term financing methods allows the firms to minimize debts by transferring the risk to other firms (Plewa, 1995, 011). Both firms have been able to meet their loan payments with UKFI being the leading in the amount that it pays each year and this indicates a more prudent approach on their part. RBS has relied heavily on issue of its ordinary shares to finance its projects for the years. However in 2012, it mainly raised funds from the issue of its subordinated liabilities as well as proceeds from non-controlling interests issued. Non-controlling interest refers to that portion of a subsidiary corporations stock that is not owned by the parent corporation. It allows the firm to make its financial decision without having to consult the holders of the non-controlling interests making its holding more advantageous for the