7. Analyzing accounting data for managerial decisions Accounting data are used to analyze cash flows, and this analysis is critical for decision making. Consider the following case: J&H Corp. recently hired Jeffrey. His immediate mandate was to analyze the company. He has to submit a report on the company's operational efficiency and estimate potential investment in working capital. He has the income statement from last year and the following information from the company's financial reports as well as some industry averages. Last year, J&H Corp. reported a book value of $600 million in current assets, of which 10% is cash, 12% is short-term investments, and the rest is accounts receivable and inventory. The company reported $510.0 million of current liabilities including accounts payable and accruals. Interestingly, the company had no notes payable claims last year. There were no changes in the accounts payables during the reporting period. The company, however, invested heavily in plant and equipment to support its operations. It reported a book value of $960 million in long-term assets last year.