Cash flow. Business & Finance homework support| Business & Finance homework help
1. Statement of Cash Flows
Calendar Year 2010.
Cash Flows from Operating Activities
Gross Income 55,000
Compensations to balance net income with cash flows.
Depreciation Expense 8,550 >
Increase in Accounts Receivable (2,200) >
Decrease in Inventory 4,450 >< br >Increase in Other Current Assets 1,000 < br >Decrease in Accounts Payable (1 ,800) < br >Decrease In Accrued Liabilities (900 ) < br >Net Cash Provided by Operating Activities 55 ,900
< br >< br >Cash Flows From Investing Activities :
< br >Long – term Investments 0
< br >Purchase of Equipment (67 , 550)
< Br >Sale Of Equipment 2 , 100
< Br Net Cash Used In Investing Activities (6 5 , 450 )
< Br >< Br >Cash Flows From Financing Activities : < Brold Bonds Paid Off 0
New Bonds Issued 30 , 000
Dividends paid out 0.
The Net Cash Resulted from Financing Activities: 30, 000
Net Cash Increase/Decrease 10 500
Starting Balance of Cash 10 00
Cash balance at the end of each month 20 500
2. The economic sector it is located in and its current state would determine what stage of life the company is currently at. You can expect it to grow or shrink depending on industry and market conditions.
3. This business appears to be financing their growth through debt via bonds which are being issued for capital expenditure projects such as equipment purchases; this implies that they have placed greater emphasis on managing their operational costs rather than relying heavily upon equity sources during expansion cycles which can sometimes prove too costly due to higher required interest rates associated with external venture capital investments relative dividends paid out shareholders henceforth making wise decision balancing budget constraints against potential growth opportunities available considering circumstances present under scrutiny herewith & herein above clearly illustrated respectably