Question
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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