What effect increases or decreases in asset and liability accounts have on cash flow.

Scenario:The chief financial officer (CFO), Karl Richland, of Semtell Company in Cincinnati, Ohio, is asking for your advice. The CFO explains sales are increasing but there is a constant matter of not having enough cash to meet payroll or pay vendors within 30 days.Checklist: Using the information contained in the company’s cash flow statement, prepare an informational business letter to the CFO to explain:Why cash can go down even when sales are up.How increases in accounts receivables and inventory balances affect cash flows within a company.What effect increases or decreases in asset and liability accounts have on cash flow.How changes in accounts payable balances impact cash flows.Recommend a possible solution for the company’s shortage of working capital.Your informational business letter should:Use the accepted business letter format and example as provided above.Utilize Standard English and use correct spelling and grammar.Provide a clearly established and sustained viewpoint and purpose.The writing should be well ordered, logical, and unified, as well as original and insightful.Include at least one scholarly, high-quality, and current Purdue Global Library source and/or your textbook