Read the following case study and answer question.

Aninjey is a CEO of Alfa Ltd. He is running a shoe business where his company is manufacturing canvas shoes, made up of breathable t-shirt fabric. His business is having a good liquidity position. He has already issued 200 equity shares earlier and has a company policy of paying regular dividends to its shareholders. He wants to expand his business and for that he required 100 crores. He asked his Finance Manager to prepare a financial blueprint of the same in order to have the right debt-equity ratio, so that a right financial balance can be maintained.

From the above case study, find out the cash flow position of Alfa Ltd.

High

The correct answer is option (1)- High.

Based on the information provided in the case study, Alfa Ltd. seems to have a high cash flow position.

Good liquidity position: The company is described as having a "good liquidity position," which suggests that Alfa Ltd. has adequate cash flow and financial flexibility to meet its short-term obligations.

Equity issuance and regular dividends: The company has issued 200 equity shares and pays regular dividends to its shareholders. This indicates that it is generating enough profits to distribute dividends while maintaining sufficient liquidity to operate the business.

Expansion requirements: Although Alfa Ltd. requires 100 crores for expansion, the fact that it has a good liquidity position suggests that it is in a stable cash flow situation and can potentially handle this large amount of capital either through retained earnings, additional equity, or debt.

Thus, the company’s cash flow position is likely high, indicating it can support its operations and future growth.