1. In which direction (positive or negative) would you normally expect each of the following cash flow categories to be? Explain your answer.

1. Cash flows from operating activities.
2. Cash flows from investing activities.
3. Cash flows from financing activities.

2. Identify, at least, three reasons that make the profit not equal to the net cash flow?

3. How will each of the following events ultimately affect the amount of cash?

1. An increase in the level of inventories.
2. A rights issue of ordinary shares.
3. A bonus issue of ordinary shares.
4. Depreciating a non-current asset.