Part1. CASE PROBLEM

Read the following case, analyze interpret and apply the necessary corporate decisions in solving the given below :

Willey, a recent graduate of the University of Technology with four years of banking experience, was recently brought in as assistant to the chairman of the board of Marvel Industries, a manufacturer of electronic goods. The company doubled its plant capacity, opened new sales offices outside its home territory, and launched an expensive advertising campaign. Marvels results were not satisfactory, to put it mildly. Its board of directors, which consisted of its president and vice-president plus its major stockholders (who were all local business people), was most upset when directors learned how the expansion was going. Suppliers were being paid late and were unhappy, and the bank was complaining about the deteriorating situation and threatening to cut off credit. As a result, Sedrick, Marvels president, was informed that changes would have to be made, and quickly, or he would be fired. Also, at the boards insistence, Willey was brought in and given the job of assistant to Faisal, a retired banker who was Marvels chairman and largest stockholder. Faisal agreed to give up a few of his surfing days and to help nurse the company back to health, with Willeys help. Willey began by gathering financial statements and other data. Assume that you are Willeys assistant, and you must help him answer the following questions for Marvel.

Some recent financial statements for Marvel Corporation follow.

MARVEL CORPORATION
2020 and 2021 Balance Sheets
Assets	2020	2021	Liabilities and Owners Equity	2020	2021
Current assets			Current liabilities
Cash	$ 32,653	$ 39,350	Accounts payable	$ 34,886	$ 44,285
Accounts receivable	16,911	28,877	Notes payable	18,058	16,848
Inventory	34,495	44,336	Other	18,871	25,619
Total	$ 84,059	$ 112,563	Total	$ 71,815	$ 86,752
			Long-term debt	$ 110,000	$ 140,000
			Owners equity
			Common stock and paid-in surplus	$ 55,000	$ 55,000
Fixed assets			Accumulated retained earnings	288,343	333,683
Net plant and equipment	$ 441,099	$ 502,872	Total	$ 343,343	$ 388,683
Total assets	$ 525,158	$ 615,435	Total liabilities and owners equity	$ 525,158	$ 615,435

MARVEL CORPORATION
2021 Income Statement
Sales		$ 531,750
Cost of goods sold		377,294
Depreciation		46,686
Earnings before interest and taxes		$ 107,770
Interest paid		20,650
Taxable income		$ 87,120
Taxes (25%)		21,780
Net income		$ 65,340
Dividends	$ 20,000
Retained earnings	45,340

1. Use the above information to prepare the 2021 statement of cash flows for Marvel Corporation. Calculate the net cash from operating activities. (7 marks ) (Negative answers should be indicated by a minus sign.)
2. Work as a team in conducting a thorough investigation of all the activities and determining the net cash for investment activities. (6 marks )
3. Undertake a critical evaluation of all the activities. Provide the net cash in financing activities and also the cash at the beginning and end of the year.

(7 marks)