5. Cash flows Aa Aa "Cash Is King" for all businesses You can determine a company's cash situation by analyzing its cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets. A firm has $20 million in revenues. Does that mean it has generated a cash flow of $20 million? Yes No The statement of cash flows reports a company's cash inflows and outflows for a given accounting period by categorizing the company's sources (inflows) and uses (outflows) of cash as either operating, investing, or financing activities. Determine whether the activities described in the following table should be categorized as operating, investing, or financing activities in the statement of cash flows. Financing Operating Investing Activity Activity Activity Activity A company reports a 10% increase in its accounts payable from the last month. HappySnacks Inc. uses cash to repurchase 10% of its common shares. A pharmaceutical company buys marketing rights to sell a drug exclusively in East Asian markets. Ruth Enterprises distributes a holiday bonus to all its employees. Cute Camel Woodcraft Company reported net sales of $2,500,000 last year and generated a net income of $625,000. Last year's accounts receivable increased by $290,000. What is the maximum amount of cash that Cute Camel received from sales last year? Cute Camel Woodcraft Company reported net sales of $2,500,000 last year and generated a net income of $625,000. Last year's accounts receivable increased by $290,000. What is the maximum amount of cash that Cute Camel received from sales last year? $1,657,500 $915,000 $1,105,000 $2,210,000