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Suppose you are a Financial Analyst. The CEO gives you a Cash Flow Statement of two companies and asks you to analyze the condition of

Suppose you are a Financial Analyst. The CEO gives you a Cash Flow Statement of two companies and asks you to analyze the condition of these businesses. The Cash Flow Statement of two companies is listed below.

Statement of Cash Flow for the year ended December 31, 2020

Raynolds Company($)

Computer Services Company ($)

Cash flows from Operating Activities

Net Income

Adjustments to reconcile

Depreciation expenses

Loss on disposal

(Increase)/Decrease in account receivables

Increase in inventory

(Increase)/Decrease in prepaid expenses

Increase/(Decrease) in account payables

Increase/(Decrease) in accrued expenses

Net Cash provided by Operating Activities

33,000

2,000

(42,000)

(54,000)

2,000

(17,000)

10,000

125,000

(66,000)

59,000

9,000

3,000

25,000

(5,000)

(4,000)

16,000

(2,000)

45,000

(42,000)

3,000

Cash Flow from Investing Activities

Sales of Land

Sale proceed from disposal

Purchase of Equipment

Net Cash used by Investing Activities

25,000

34,000

(166,000)

(107,000)

(120,000)

4,000

(25,000)

(141,000)

Cash Flow from Financing Activities

Redemption of bonds

Sale of Common Stock

Dividends payment

Net cash provided by Financing Activities

(10,000)

130,000

(55,000)

65,000

-

20,000

(29,000)

(9,000)

Net increase/(decrease) in Cash

Beginning Cash balance

17,000

37,000

(147,000)

33,000

Ending Cash balance

54,000

(114,000)

Non-cash Investing and Financing Activities

Issued Common Stock in exchange for Land

Issuance of bonds payable to purchase Land

30,000

110,000

Questions;

Compare the situation of the two companies using the two Cash Flow Statement provided. Write about 1,000 words.

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