Many analysts say an enterprise goes through four stages during its life: 1. Start up-high risk of failure, not yet clear if business will succeed 2. Growth - business plan is viable, management gearing up for growth 3. Maturity - business is profitable, but growth is minimal or flat 4. Decline - revenues are declining The following are summary cash flow statements for three equal-sized companies: ($ millions) B A C Net cash flows from operating activities $ (300) $ (300) $ 300 Net cash used in investing activities (900) 1,200 (30) (90) 210 (240) Net cash from financing activities Net Increase (Decrease) in Cash (120) (30) - a. What might cause company C's net cash from financing activites to be negative? b. Looking at companies A and B, which company would you prefer to own? Why? c. Is company C's cash flow statement cause for concern on the part of management or shareholders? Why or why not? d. Which of the above four stages do you think each Company may be in? 40

Many analysts say an enterprise goes through four stages during its life: 1. Start up - high risk of failure, not yet clear if business will succeed 2. Growth - business plan is viable, management gearing up for growth 3. Maturity - business is profitable, but growth is minimal or flat 4. Decline - revenues are declining The following are summary cash flow statements for three equal-sized companies: a. What might cause company C's net cash from financing activites to be negative? b. Lookng at companies A and B, which company would you prefer to own? Why? c. Is company C's cash flow statement cause for concern on the part of management or shareholders? Why or why not? d. Which of the above four stages do you think each Company may be in