Minicase Med/Waste, Inc.

Med/Waste, Inc., provides commercial cleaning and medical waste disposal services to hospitals and other large health care providers, primarily in the state of Florida. In its 1995 statement of cash flows, Med/Waste showed increases in cash from investing and financing activities and a net decrease in cash from operations. The largest sources of cash were the sale of investments and the repayment of a loan to a director.

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\section*{Instructions}

Answer these questions:

(a) What concerns might a creditor of Med/Waste have about this information reported in the statement of cash flows? What additional information might a creditor seek to confirm or reduce these concerns?

(b) Would an investor view this information from the statement of cash flows as negative or positive if the overall cash position improved? Explain.