Chapter 3

I. Working Capital Policies

A company needs to closely monitor its working capital levels in order to keep its cash
requirements firmly in check. Lack of attention to the investment in working capital (which is receivables,
inventory, and payables) can result in a runaway need for cash, especially when sales are growing. A
business can do this most effectively by instituting and enforcing a number of policies. The following
working capital policies are sorted by the component of working capital that they most directly affect.

Appropriate working capital policies are:

1. Cash Policies
• Do not invest funds in illiquid investment vehicles. Even if a long-term investment opportunity
offers the opportunity for outsized returns, do not make the investment unless you are sure there
are sufficient funds on hand to support all reasonable working capital needs during the period
when the funds will be tied up in the investment.
• No investment duration shall exceed the forecasting period. If you are willing to tie up cash in
somewhat illiquid investments, then at least keep from making investments that cannot be
accessed for periods longer than what the company is currently forecasting. Otherwise, the
company may find itself with a large cash requirement and no funds available to offset it.
• All deposited funds must be insured. Only invest cash in accounts that are insured by the FDIC, to
guard against the loss of funds due to bank failure. This is a difficult policy to enforce, since a
business may have to distribute excess cash among many bank accounts to fit within the insured
limit.
2. Accounts Receivable Policies
• Do not allow payment terms greater than __ days. Do not allow the sales staff to offer terms to
customers that exceed a specific number of days without prior approval by a senior manager.
• The maximum credit offered a customer is ___. Use a formula that best fits your industry to arrive
at a reasonable maximum amount of credit to offer customers, over which a senior manager must
approve the terms.
• Stop customer credit once days outstanding exceed __ days. This policy is designed to keep
additional credit from being extended to a customer who is not paying in a timely manner.
• Stop customer credit if a customer check does not clear the bank. This is a prime indicator of
impending customer insolvency, and so can be used as a trigger to withhold credit and thereby
reduce bad debt.
3. Inventory Policies
• Review inventory on hand exceeding __ days of usage. It is exceedingly difficult to adopt rules
that will minimize inventory, but consider this policy to bring excessive inventory levels to the
attention of management.
• Adopt just-in-time purchasing on qualified raw materials and merchandise. This policy is
designed to minimize on-hand inventories by making purchases as late as possible and having
items delivered in small quantities.
• Drop shipped inventory is the preferred stocking method. This policy shifts inventory ownership
to the company's suppliers, who ship directly to the company's customers on its behalf.
4. Accounts Payable Policies
• Do not pay accounts payable early. Adopt a monitoring system that highlights any payment made
earlier than the due date required by the supplier.
• Require purchase orders for amounts exceeding $___. This policy enforces an examination of
larger expenditures before they are actually made.
• Disallow purchases exceeding the department budget. If a manager commits to a specific
expenditure level for his department, then do not allow expenditures above that level without
approval by a senior manager.

The level of aggressiveness of working capital polices depends to a considerable extent upon the
availability of a large, untapped line of credit. If this is available, a company can risk an occasional
negative cash situation, since cash can be readily replenished from the line of credit.
The concept of working capital does not apply to banks since financial institutions do not have typical
current assets and liabilities such as inventories and accounts payable. Also, it is very hard to determine
current liabilities for banks, because banks typically rely on deposits as a source for their capital, and it is
not certain when a customer will demand his deposit back.

Instead the researchers used the Working Capital Loans of each bank (BPI, BDO, Metrobank)

Working Capital Loans

A working capital loan is a loan that has the purpose of financing the everyday operations of a
company. Working capital loans are not used to buy long-term assets or investments and are instead used to
cover accounts payable, wages, etc. Companies that have high seasonality or cyclical sales cycles usually
rely on working capital loans to help with periods of reduced business activity.

1. Bank of the Philippine Island

Whether a large corporation, medium-sized company or a small business enterprise, our Corporate Banking
Relationship Managers can put together a loan package that will address your needs. BPI can help their
customers fund the following:
• Expansion and investments, such as:
Purchase, construction or renovation of a commercial or industrial property.
Acquisition of a fixed asset such as new or upgrade equipment and machinery to improve production
capacity.
• Bridging the gaps in your working capital requirements for:
Receivables
Local or imported raw material inventory
• Importations
• Export production
• New projects
• Refinancing of existing loans
• Purchase of domestic checks, foreign drafts and export bills

Depending on the requirements as well as BPI’s evaluation of the business, the loan can vary as to type of
facility (straight loan or credit line), denomination (local or foreign currency), security (clean or secured),
term (short or long-term) and interest re-pricing (fixed or floating rate).

BPI OFFERS:
1.1. STRAIGHT LOANS
Need a specific amount of funds for payments within a prescribed time period? BPI offer straight loans
which may be short-term (payable within 365 days) or long-term (more than 365 days).
• Short–Term Loan (STL)
• Term Loan (TL)

1.2. CREDIT LINES

For recurring working capital requirements, BPI offers credit lines for a variety of purposes. The lines
mature in one year and are renewed annually. Loan availments are done through 360-day promissory notes
(PNs).

1.3. TRADE CREDIT FACILITIES

• Export Advance Line (EAL)
• Import Letter of Credit/Trust Receipt (LC/TR) Line
• Export Bills Purchased Line (EBPL)

1.4. OTHER CREDIT FACILITIES

• Revolving Promissory Note Line (RPNL)
• Bills Purchased Line (BPL)
 • Sugar Quedan Financing Line (SQFL)
• Guaranty Line

BPI accepts the following collateral:

• Peso and foreign currency deposits
• Government securities
• Real estate (vacant lot or with improvements)
• Acceptable shares of stocks
• Standby letter of credit issued by a domestic or foreign bank
• Assignment of export letter of credit/purchase order/sales contract

ADVANTAGE OF BPI
BPI’s flexible loan packages are designed to cater to your business needs. Corporate clients can take
advantage of BPI’s attractive interest rates and our dedicated team of corporate banking relationship
managers.

2. Banco De Oro Unibank Incorporation

II. Current Events effect on Working Capital

BPI to open business bank solely for SMEs

The Bank of the Philippine Islands (BPI) announced Monday the creation of Business Bank, which will
solely accommodate the Small and Medium Enterprises (SMEs) in the country.
This was the pronouncement made by BPI president and chief executive officer Cezar P. Consing in his
visit to Cebu last Monday.

The country’s third biggest bank in asset terms, will serve fully the complex and unique needs of the SMEs,
especially that the market has become too competitive.

"We are seriously looking at the SME market. We will be spending our resources in servicing [fully] the
SME clients," said Consing in an interview. The BPI Business Bank is expected to commence next year.
Although, BPI's existing corporate clients are composed of SMEs, Consing said the bank has seen a dire
need to create a dedicated facility that will focus on the needs of this expanding market.In this facility, loan
sizes will be adjusted accordingly depending on a client's specific need. The SMEs loan package will be
made much more attractive and bundled.

BPI, Consing added has seen the need of SMEs of bank support and there are still a huge number of small
and medium business players who are yet to enjoy the banking side in terms of accessing capitalization
requirement.

Traditionally, like any other player in the industry, BPI only operates generalized service directed to
corporate and retail banking. Corporate banking handles the bulk products in assisting the companies.
This time, BPI takes its service out of the box by introducing the Business Bank, whose services are
tailored-fit to the need of SMEs.

Reference:
Dagooc, Ehda M. (2017, October 25) BPI to open business bank solely for SMEs. Retrieved from:
www.philstar.com:8080/cebu-business/2017/10/25/1752201/bpi-open-business-bank-solely-smes

Effect

Bank of the Philippine Islands is about to open a business bank solely for SMEs. BPI is composed
of different subsidiaries which are experiencing continuous success. One of the subsidiaries is the BPI
Family Savings Bank which continues to gather awards for making their loans more accessible and
affordable to countless Filipinos who are actively pursuing their dreams. Now, on their new branch to be
opened, the Business Bank, they will be able to help more customers who wants to build a business to start
up with their future. This is a great advantage on their business as it will bring more income to their
company. The promos and advantages that were said in the article like the loan sizes will be adjusted
accordingly depending on their needs, it will attract SME clients to apply on BPI which would greatly
affect the company’s working capital financing. As it will affect the BPI’s services that will result for
higher interest revenue. Also, As BPI helps the SMEs, SMEs will be able to play a major role in creating
jobs and in generating income for low income Filipino people; foster economic growth, social stability, and
contribute to the development of a dynamic private sector.

BPI aims to raise P5B via deposit notes offering

Ayala-led Bank of the Philippine Islands is raising at least P5 billion from an offering of high-yielding
deposit notes to support expansion plans and diversify funding sources.

BPI launched on Friday the first tranche of its long-term negotiable certificates of time deposit (LTNCTDs)
with a tenor of five and a half years and an indicative interest rate of 3.625 percent to 3.75 percent per
annum, the bank disclosed to the Philippine Stock Exchange on Friday.

This is part of a P30-billion LTNCD issuance recently approved by the Bangko Sentral ng Pilipinas, which
can be issued in one or more tranches within one year.

“We continue to diversify our funding sources as we cater to the changing financial needs of our clients,”
said Cezar Consing, BPI president and chief executive officer.

“This is our second time to offer LTNCTDs. The first in 2007 was a huge success and we are confident that
with the attractive yield, relative safety, and flexibility of the LTNCTDs, we will have the same success
with our latest offer.”

The offer period for the first tranche of LTNCTDs started on Friday (Oct. 27) and will run until Nov. 16,
2017. The issue and listing dates are set for November 24, 2017.

The final interest rate will be set prior to the end of the offer period. Interest on the LTNCTDs will be paid
quarterly.
The minimum investment amount is set at P100,000, with increments of P50,000 thereafter.
ING Bank N.V., Manila Branch, was tapped as the sole arranger of this deal and also acts as selling agent
together with BPI Capital Corp. and BPI.

LTNCTDs are negotiable certificates of time deposit issued by banks, with a minimum maturity of five
years and denominated in Philippine peso. They usually have higher yields compared to regular time
deposits or savings accounts.

Unlike regular time deposits, LTNCTDs cannot be pre-terminated by holders. However, investors can
negotiate or transfer their holdings in the secondary market prior to maturity. Interest on LTNCTDs is tax-
free for individual investors if the instrument is in the name of the individual holder and is held for at least
five years.

These instruments are insured with Philippine Deposit Insurance Corp. subject to applicable rules and
regulations on maximum insurance coverage.

Reference:
Dumlao-Abadilla, Doris (October 30, 2017). BPI aims to raise P5B via deposit notes offering. Retrieved
from http://business.inquirer.net/239532/bpi-aims-raise-p5b-via-deposit-notes-offering

Effect:

The effect of the rise in the bank’s deposit notes on BPI’s working capital financing would greatly affect
the company’s working capital financing. Being the other party to working capital financing in a business’
point of view, this affects BPI’s lending services for it caters more clients to fund. The additional funds
would help suffice BPI’s clients’ companies with their working capitals. The greater the number the clients,
the higher BPI’s interest revenue.
This raise would also attract more investors if BPI would lower their interest rates.

BDO opens 1,000th branch

The country’s largest lender BDO Unibank has reached the 1,000-branch milestone – establishing the
widest footprint among Philippine banks – with the opening of its newest branch in Davao City.

BDO’s 1,000th branch was opened in Buhangin, one of the most populated areas in Davao City. Jaime Yu,
senior executive vice president of BDO and head of branch banking, said reaching the 1,000-branch
milestone was a testament to the bank’s commitment to make banking more accessible to Filipinos whether
they are located in the metropolitan area or far-flung provinces.

“We fully recognize that there are still about 70 percent of the population with no bank accounts or has yet
to enter the formal banking sector. The continued growth of our branches is our way of creating
opportunities for more people to experience the rewards of having a bank that takes care of their financial
needs,” Yu said in a press statement on Wednesday.

In 2016, BDO had a branch network of 982, including one branch in Hong Kong. Of this total, 492
branches were in Metro Manila, 305 in Luzon, 108 in Visayas, and 76 in Mindanao.

This year, the bank plans to add 60 more branches, thereby expanding its network to 1,042 by the end of
2017.

Apart from expanding its footprint, BDO has changed the game in banking by introducing longer banking
hours and even weekend banking.
The bank’s distribution channel is complemented by over 3,600 automated teller machines (ATMs) and
electronic channels.

Reference:
Dumlao-Abadilla, Doris (March 22, 2017). BDO opens 1,000th branch. Retrieved from
http://business.inquirer.net/226575/bdo-opens-1000th-branch

Effect:

BDO Unibank opens their 1000th branch located in Buhangin, Davao which is one of the most
populated in that area. Opening a new branch means that there is a capital expenditure of the company, but
with this expenditure there will be no change in working capital if the asset is a current asset. This is
because you are using an asset, cash, to purchase another asset. Expansion of the company will increase
sales. It will also increase cash or accounts receivable and with this, it will affect the working capital of the
company.

The advantage of opening a new branch is larger resources will increase ability of company to face any
crisis. By the end of 2017 the target of BDO is to put up branches in areas both in urban and rural centers to
help reach the still-sizable number of unbanked and under banked Filipinos, thereby expanding its network
to 1,042.

BDO pulled in P20.4-B net profit at end-Sept

The country’s leading lender BDO Unibank chalked up a P20.4-billion net profit at the end of September,
reaching 73 percent of its full-year earnings goal for 2017.

Based on a disclosure to the Philippine Stock Exchange, BDO’s nine-month net profit went up by 5 percent
year-on-year on a steady growth in core lending and fee-based businesses.

Excluding extraordinary items, BDO’s net income would have expanded by 17 percent year-on-year, the
bank said. One-off items were related to the consolidation of BDO’s life insurance business last year.

For the entire 2017, BDO is targeting net profit to reach a record-high P28 billion, 7.3 percent higher than
the level posted last year. The bank expects this year’s profitability to be driven mostly by recurring
earnings from lending and fee-based businesses.

During the nine-month period, BDO’s net interest earnings rose by 23 percent year-on-year to P59.8
billion, driven by the 18-percent rise in customer loan portfolio to P1.7 trillion.
Expansion

BDO reported an expansion across all loan market segments.

Noninterest income, on the other hand, rose by 9 percent year-on-year to P34.8 billion due to the growth of
fee-based income and insurance premiums, which made up for the decline in trading and foreign exchange
income.

Fee-based income for the period grew by 30 percent year-on-year to P20.8 billion, while insurance
premiums expanded by 19 percent year-on-year to P7.2 billion.

On the other hand, trading and foreign exchange gains declined by 26 percent year-on-year to P3.3 billion.
The expansion in BDO’s earning assets was funded by a 15-percent growth in total deposits to P2.1 trillion,
in turn driven by the 20-percent increase in low-cost deposits which accounted for 73 percent of total
deposit liabilities.
On the expenditure side, BDO saw a 20-percent increase to P63.6 billion. Net of extraordinary items,
operating expenses would have increased by only 13 percent in line with continued business expansion, the
bank said.

BDO set aside P4.4 billion in provisions for bad loans even while maintaining a good quality of assets. Bad
loans were steady at 1.3 percent of total loan portfolio. For every P1 of nonperforming loans, the bank set
aside P1.36 as cover.

Reference:
Dumlao-Abadilla, D. (n.d.). BDO pulled in P20.4-B net profit at end-Sept. Retrieved from
http://business.inquirer.net/239748/bdo-pulled-p20-4-b-net-profit-end-sept

Effect:

The extent to which an increase in revenue will affect your company's working capital depends on how
efficiently your business operates. (Merritt, n.d.).If your company is already profitable, then more revenue
should translate to more working capital. But if the expenses increase as the revenue increases, then the
increase might not improve working capital much, if at all.

Maintaining positive working capital without resorting to financing or selling business assets requires
consistent cash inflows from sales and accounts receivable collections. Increasing net income by increasing
sales revenues and managing expenses efficiently is one way to meet positive operating cash flow goals
(Lohrey, n.d.).
The increase in the reported net profit of BDO at the end of September resulted from rise in customer loans,
lending and fee-based businesses. Also, the company reported expansion across all market segments that
will result to a 20% increase in expenditures, and a 13% increase in operating expenses.
The company manage its expenses efficiently despite the increase in its net profits. This is actually a good
strategy in maintaining its working capital level. However, according to the article, its earnings assets was
funded by deposits that caused a total of 73% increase in its total deposit liabilities that caused a decline in
its working capital. When a company uses debt to pay for the capital asset, then there will be a decline in
working capital. The current portion of the debt, the amount due in the next year, will decrease working
capital (Mcbride, n.d.).

Metrobank loses over P14B in market value amid fraud issue

MANILA, Philippines – Metropolitan Bank & Trust Company (Metrobank), lender owned by business
tycoon George Ty, lost P14.63 billion in market value in a day, as the Bangko Sentral ng Pilipinas (BSP)
launched its investigation into the alleged P900-million fraud case involving a senior bank official.

Shares in Metrobank plunged by 5.03% to P86.90 each on Friday, July 21, from P91.50 each on Thursday.
This happened the same day the National Bureau of Investigation (NBI) presented Maria Victoria Lopez,
vice president of the Corporate Service Unit at Metrobank’s Makati head office, as the primary suspect in
the case.

"The stock of Metrobank was the biggest underperformer as they were hard hit by the news, as the BSP is
to probe the bank on how a single officer circumvented internal controls, which led to the alleged loss of at
least P900 million in loans," Marita Limlingan, president of Regina Capital Development Corporation, said
in a report.

NBI spokesperson Ferdinand Lavin said on Friday that the Metrobank senior official was arrested while
trying to move the stolen money to an unspecified personal account. The money was taken from the credit
facility of one of the Metrobank's biggest corporate clients.

Lavin said the 54-year-old Lopez, who was trusted by big corporate clients, had served the bank for over 3
decades and received a monthly salary of at least P250,000.
This is the latest controversy to hit the Philippine banking industry in the past few months. In 2016, Rizal
Commercial Banking Corporation (RCBC) was slapped a record P1-billion fine for involvement in $81-
million Bangladesh Bank heist.

Last month, numerous clients of Ayala-led Bank of the Philippine Islands (BPI) reported unauthorized
transactions in their accounts for two days. The bank attributed the fiasco to an "internal data processing
error."

Weeks after the BPI glitch, Banco de Oro (BDO) became the target of multiple ATM-skimming attacks,
while Union Bank probes a suspected P17-million fraud incident involving one of its employees.

Despite these mishaps, BSP Governor Nestor Espenilla Jr and the Bankers Association of the Philippines
said on Friday they are confident in the banking sector's resilience. (READ: Banking sector backs
Metrobank to pull through P900 M fraud case)

"We're looking into it. We have to look into the circumstances and the facts around it. That's really all that
the BSP can say for now," Espenilla said.

In a separate disclosure to the local bourse, Metrobank said the bank will continue with its daily operations.

"The bank is reinforcing its commitment to the highest standards of integrity and upholds the protection of
its customers as its main priority. No customer has been affected in this incident," Metrobank said in a
statement.

Metrobank is the country's second largest bank in terms of total assets with P1.9 trillion as of first quarter
of 2017. It booked a net income of P18.09 billion last year as well as profit of P6.21 billion for the start of
this year.

Reference:
Rappler (2017, July 23). Metrobank Loses Over P14B in Market Value Amid Fraud Issue. Retrieved from
https://www.rappler.com/business/176489-metrobank-market-value-fraud-issue

Effect:

Metropolitan Bank and Trust Co. (Metrobank) had a loss of P14 billion in market value due to a fraudulent
loan transaction amounting to P1.75 billion by one of its ranking officials. Fraud can have a substantial
impact on a business, no matter what size it is. Financial loss is an obvious effect of fraud. If the official
stole P1.75 billion from loans, Metrobank also loses P1.75 billion. The working capital of the bank will
become lower because the stolen money was from the cash that the bank lends to its customers.

Metrobank’s shares rebounded last July 24, 2017 after losing as much as P14.6 billion in market value.
Metrobank shares were up 1.27 percent to P88 in early trading, recovering nearly P4 billion, when
authorities announced the arrest of one of its officers over alleged bogus loans. Based on stock exchange
data, Metrobank's 3,180,172,786 shares were worth P276.4 billion on Friday, from P291 billion on
Thursday. The bank was worth P280.3 billion on Monday at P88 per share.

The P14-billion loss was not justified since the amount involved was was not even one percent of the
bank's P2 trillion in assets, said Regina Capital managing director Victor Alvin Limlingan.

"Management has to get the right balance between proper controls and giving its people the flexibility they
need to respond to market change," Limlingan said. The price drop provides investors an opportunity to
buy Metrobank shares, he said. Through this, Metrobank will gain more investment that will increase cash
for lending money which will also give an increase in the working capital as it tries to fix the problem. "If
you wanna make a quick buy, I think this will be forgotten soon enough as the cycle goes on," Limlingan
said. Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi Fonacier said the incident is an "isolated
case" and that the banking

Metrobank nets P13.2B

Ty family-led Metropolitan Bank and Trust Co. grew its nine-month net profit by 4.87 percent year-on-year
to P13.19 billion on higher earnings from core lending activities.

For the third quarter alone, net profit attributable to equity holders of parent firm amounted to P3.69 billion,
5 percent higher than the level on the same period last year, the bank said in a regulatory filing on Monday.
The group’s return on equity (ROE) for the period ended September was higher at 8.66 percent compared
with 8.49 percent for the same period last year due to the net effect of the increase in net income
attributable to equity holders of the parent company and the 2.84 percent increase in the average equity.

For the third quarter alone, the bank reported a 17.07-percent improvement in net interest income to P15.69
billion. Other operating income for the quarter also rose by 31.24 percent year-on-year to P6.51 billion as
net trading and securities and foreign exchange gains surged by 130 percent while fee-based income –
referring to service charges, fees and commissions – rose by 17.11 percent. Miscellaneous income
increased by 13.64 percent.

For the nine-month period, the increase in income was driven by a 16.14-percent year-on-year growth in
net interest income to P45.31 billion. This was mostly due to higher higher interest income on loans and
receivable.

Other operating income rose by 1.18 percent to P17.63 billion in the nine-month period due to the increase
in fee-based income.

Total operating expenses for the nine-month period increased by 7.52 percent year-on-year to P35.76
billion on higher compensation and fringe benefits alongside higher occupancy and equipment-related and
miscellaneous expenses.

Provision for credit and impairment losses increased by P1.2 billion to P5.91 billion while provision for
income tax was higher by P1.69 billion to P5.91 billion year-on-year.
Consolidated total assets amounted to P1.99 trillion as of end-September.
Loans and receivables represented 58.14 percent of the group’s total assets, expanding by 9.09 percent
year-on-year driven by the strong demands for loans from all segments. I
Deposits amounted to P1.47 trillion as of end-September, of which low-cost deposits represented over 60
percent.

Reference:
Dumlao-Abadilla, Doris (November 6, 2017). Metrobank nets P13.2B. Retrieved from
http://business.inquirer.net/240065/metrobank-nets-p13-2b
Effect:

The overall increase of Metrobank's net profit was due to four reasons: First is the increase in the earnings
from their core lending activities. Second is because of the surge of net trading and securities and foreign
exchange gains. Third is its higher interest on loans and receivable. And lastly because of the increase in
the earnings in fee based income.

Because of this overall increase in their net profit, Metrobank will be able to have more assets in their next
quarters which can be used for their operation. Their good performance could also induce new investors to
invest in Metrobank. We believe that this would result to higher amount of available cash which could be
used in the operations because the nature of their business is mostly lending and investing activities. This
would cause a rise in the company's working capital that will be helpful to accomodate the increase in their
expenditures that is due to higher compensation and fringe benefits alongside higher occupancy and
equipment-related and miscellaneous expenses.
References

Bragg, S. (May 14, 2017). Working Capital Policies. Retrieved from

https://www.accountingtools.com/articles/2017/5/14/working-capital-policies

Blokhin,A. (October, 15, 2015). Do Banks have Working Capital? from

https://www.investopedia.com/ask/answers/101515/do-banks-have-working-capital.asp

Investopedia (n.d). Working Capital Loan. Retrieved from

https://www.investopedia.com/terms/w/workingcapitalloan.asp

Metrobank SME (n.d). SME Business Loans. Retrieved from

https://www.metrobank.com.ph/sme/BusinessLoans.aspx
BDO Unibank Inc. (n.d). Loans. Retrieved from
https://www.bdo.com.ph/business/loans/working-capital-loan

BPI (n.d). Loans and lines of credit. Retrieved from

https://www.bpiexpressonline.com/p/0/57/business-loans

Merritt, C. (n.d.). The Effect of Revenue Increase on Working Capital. Retrieved from
http://smallbusiness.chron.com/effect-revenue-increase-working-capital-42574.html

Mcbride, C. (n.d.). The Impact of Capital Expenditure on Working Capital. Retrieved from
http://smallbusiness.chron.com/impact-capital-expenditure-working-capital-4097.html

Lohrey, J. (n.d.). The Effect of Net Income Increases on Operating Cash Flow. Retrieved from
http://smallbusiness.chron.com/effect-net-income-increases-operating-cash-flow-80404.html