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1) Discuss the total changes in cash 2005. 2) Discuss, from an analyst's viewpoint, the results and effects of various events in cash flow statement

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1) Discuss the total changes in cash 2005.

2) Discuss, from an analyst's viewpoint, the results and effects of various events in cash flow statement by i. Operational cash flow ii. Investment cash flow iii. Financial cash flow

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2005 2004 Assets Cash and cash equivalents Accounts receivable (net) Inventory Equipment Accumulated depreciation equipment Total assets $ 30,500 64,500 100.000 55.000 (21.500) $228,500 $ 10.000 51,000 115.000 30.000 (14,000) $192,000 Liabilities and stockholders' equity Accounts payable Long-term notes payable Capital stock Retained earnings Total liabilities and stockholder' equity $ 52.500 70.000 60.000 46,000 $228,500 $ 46,000 50,000 60.000 36.000 $192.000 The following additional information is available: net income for the year 2005 (as reported on the income statement) was $50,000; dividends of $40,000 were declared and paid; and equipment that cost $8,000 and had a book value of $1,000 was sold during the year for $2,500. Statement OF Cash Flows For the Year Ended December 31, 20XX Operating Activities Net Income $50,000 Add: Gain on sale of Equipment $1,500 Less: Amortization Expense $7,500 Cash Flow from Operations $56,000 Increase in Accounts Receivables -$13,500 Decrease in Inventory $15,000 Increase in Accounts Payables $6,500 Net Changes in Non Cash Working Capital $8,000 A Cash Provided By Operating Activities $64,000 Investing Activities Sale of Equipment Sale of Equipment $2,500 Purchase of Equipment -$26,000 B Cash Used in Investing Activities -$23,500 Financing Activities Increase in Lon Term Notes Payables $20,000 Increase in Common stock $0 Cash Dividends Paid -$40,000 Cash Used in Financing Activities -$20,000 Net Increase in Cash (A + B + C) $20,500 Cash, Beginning of the Year $10,000 Cash, End of the year $30,500

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