Mitronics Corporation reported the following items (which are only partial excerpts) in its 1997 statement of cash flows (dollars in thousands).

1997 1996 Net earnings $788 $845 Increases (decreases) in current liabilities (512) 532 Cash provided by operating activities 276 1,377 In the financial review section of Mitronics’annual report,management reported the following:

Cash provided by operations was $276,000 in 1997 compared with

$1,377,000 in 1996.The reduction was primarily due to lower earnings from operations and a reduction in current liabilities.

Required

a. Explain in your own words what Mitronics is communicating in this note.

Why might Mitronics’ managers manage its cash in this manner?

b. What else would a financial analyst like to know about Mitronics’ cash flow from operating activities?