At the beginning of 2013, Mary Abrahams purchased a small business, the Maitz Company, whose income statement and balance sheets are shown below.

Income Statement for the Maitz Company for 2013
Sales		$175,000
Cost of goods sold		$105,000
Gross profits		$70,000
Operating expenses
Depreciation	$5,000
Administrative expenses	$20,000
Selling expenses	$26,000
Total operating expenses		$51,000
Operating profits		$19,000
Interest expense		$3,000
Profits before taxes		$16,000
Taxes		$8,000
Net profits		$8,000

Balance Sheets for the Maitz Company for 2012 and 2013
Assets	2012	2013
Current assets:
Cash	$8,000	$10,000
Accounts receivable	$15,000	$20,000
Inventory	$22,000	$25,000
Total current assets	$45,000	$55,000
Fixed assets:
Gross fixed assets	$50,000	$55,000
Accumulated depreciation	$15,000	$20,000
Net fised assets	$35,000	$35,000
Other assets	$12,000	$10,000
TOTAL ASSETS	$92,000	$100,000

Debt (Liabilities) and Equity
Current debt:
Accounts payable	$10,000	$12,000
Accruals	$7,000	$8,000
Short-term notes	$5,000	$5,000
Total current debt	$22,000	$25,000
Long-term debt	$15,000	$15,000
Total debt	$37,000	$40,000
Equity	$55,000	$60,000
TOTAL DEBT AND EQUITY	$92,000	$100,000

Directions: answer the following questions:

1. Given the information provided by the financial statements, what would you tell Abrahams? (As part of your answer, calculate the firms cash flows.)
2. How would you describe the cash flow pattern for the Maitz Company?