million shares. An additional 13 million shares is authorized for repurchase. The Company had previously completed a 22.5 million share repurchase program, for a total of 47 million shares. All references to share amounts have been adjusted for the three-for-two stock split effective August 21, 1995.

a. Explain how the company could have a net loss in 1996 and yet have a positive net cash provided by operating activities.

b. How can management mention increased net income when the company reported a net loss in 1996?

c. What was the reason given by management for the smaller than usual repurchase of its own stock (treasury stock)?

d. How did the company finance the acquisitions made in 1996 ?

e. How is the interest rate on borrowings determined?

f. What information would normally appear immediately below the statement of cash flows that seems to be missing?
g. Does the amount of cash provided by operating activities seem large enough to continue the present dividend payments?
h. Given the following data, calculate the cash flow per share of common stock ratio, the cash flow margin ratio, and cash flow liquidity ratio.

16.4 Cabletron develops, manufactures, markets, installs and supports a wide range of standards-based LAN and WAN connectivity hardware and software products. The Company's approach to networking is based on a strategy known as Synthesis, a strategic framework which combines infrastructure products and technologies, automated management tools, and support services to allow users to smoothly migrate from traditional router-based internetworks to switch-based virtual enterprise internetworks. An integral part of Synthesis is the MMAC product family, which includes the MMAC, the Company's wiring closet smart hub, and the MMAC Plus, the Company's modular advanced switching intelligent hub. All of the Company's intelligent networking products are managed by SPECTRUM, Cabletron's sophisticated enterprise-wide network management system. The Company also produces and supports other networking products, such as adapter cards, other interconnection equipment, wiring cables, and file server products, and provides a wide range of networking services. The Company believes that its broad product line and its ability to provide full service enable it to offer its customers "The Complete Networking Solution."
The company's statements of cash flow for the years 1994-1996 follow. Then the relevant portion of Management's Discussion and Analysis of the statement of cash flows is provided.

\section*{Management's Discussion and Analysis*}
Net cash provided by operating activities was \(\$ 100.3\) million in fiscal 1996 , compared to \(\$ 152.5\) million in fiscal 1995 and \(\$ 125.1\) million in fiscal 1994 Capital investment for fiscal 1996 of \(\$

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Average number of shares of common stock outstanding Net sales. Cash and marketable securities Current liabilities " (in thousands) 241,512 $3,504,629 201,213 1,501,477