Michacl took a glance at his phone screen and realized that it was almost two in the morning. After another busy day, he finally had the chance to look at the cases for tomorrow's classes. Fortunately, he was not unfamiliar with working at late hours. He actually liked the silence of the night as it helped him focus. After looking at the bundle of cases on his desk, Michael decided to start with the case for his Financial Reporting class. The topic for tomorrow's class was the statement of cash flows, and he had repeatedly heard that "cash is king" given the importance of understanding cash inflows and outflows to assess a company's financial health. In fact, in preparation for his internship interviews, he learned that the statement of cash flows was the most important financial statement. The Financial Reporting case focused on three examples of cash flow statements. These examples were intended to provide students with an understanding of, among others, the structure of the cash flow statement, the different line items, and the underlying financial health of the company. Students were expected to analyze these statements and answer the following questions for cach company: 1. What are the major sources and uses of cash? 2. How did operating cash flows compare with accrual income? Which do you think is more representative of the operating performance of the firm? 3. What are the principal items that cause a difference between net income and the change in cash? 4. Did the entity generate enough cash from operations to cover its capital expenditures and dividend payments to shareholders? If so, what did the company do with its excess free cash flow? If not, where did the company obtain the cash used to pay for its capital expenditures and dividends? 5. How did capital expenditures compare with depreciation? Why is this a meaningful comparison? 6. What other meaningful comparisons within the statement of cash flows can you imagine? 7. What additional information about the firm's cash flows would you like to know? 8. Given this information, how do you feel about the liquidity and solvency of the company? Rate the company from 1 (very strong) to 5 (bankruptcy imminent). 9. Do you have any idea what company is represented or its industry