Interpreting the One.Tel Limited statement of cash flows Shown as follows are the 1999 and 2000 cash flow statements for One.Tel Limited, a telecommunications company that was delisted in 2001.

Consolidated 2000 1999

$m $m Cash flow from operating activities Receipts from customers 510.9 300.1 Payments to suppliers and employees (684.8) (328.1)

Interest received 16.9 1.9 Interest and other borrowing costs paid (11.9) (3.5)

Income tax refunded — 0.7 Net cash used by operating activities (168.9) (28.9)

Cash flow from investing activities Proceeds from sale of investments — 1.6 Proceeds from sale of plant and equipment — 19.2 Payment for plant and equipment (87.5) (34.0)
Purchase of licences (525.6) (9.5)
Purchase of controlled entities — (6.9)
Payment of deferred consideration (1.8) —
Loans provided to wholly owned entities — —
Loans provided to other parties — (2.6)
Net cash used by investing activities (614.9) (32.2)
Cash flow from financing activities Proceeds from issue of shares 818.5 280.3 Proceeds from borrowings 139.8 59.0 Finance lease principal repayments (11.2) (4.2)
Dividends paid (1.8) (2.5)
Share buyback — (106.4)
Net cash provided by financing activities 945.3 226.2 Net increase in cash held 161.5 165.1 Cash and cash equivalents at beginning of year 172.6 8.4 Exchange rate adjustment 1.6 (0.9)
Cash and cash equivalents at end of year 335.7 172.6 Source: One.Tel Limited.
1 Outline what you can learn about One.Tel from the statement of cash flows.
2 Which factors in the statement of cash flows indicate that the company would fail within one year, and which factors indicate they would not?