Table 4.5 Statement of Cash Flows for PAS Corporation (for the Six-Month Period Ended December 31) CASH FLOW FROM OPERATING ACTIVITIES Net income +Depreciation -Increase in receivables EXPLANATION $3,000 Other things being equal, net income produces a cash inflow. 1,000 Depreciation was subtracted to get to net income but was not a cash outflowadd it back. -50,000 When you extend more trade credit, you use current cash reserves to fund sales in hopes of future cash receipts. - 16,000 Expanding inventories uses cash. 5,000 Taking trade credit decreases the cash needed to support inventories. 3,000 54,000 Borrowing more from employees decreases the amount of cash otherwise needed. -Increase in inventories +Increase in payables +Increase in accrued wages Net cash flow from operations 0 You have to get cash from somewhere to pay for new equipment CASH FLOW FROM INVESTING ACTIVITIES -Increase in gross equipment CASH FLOW FROM FINANCING ACTIVITIES +Increase in other short-term liabilities Net change excluding cash account Beginning cash and marketable securities Ending cash and marketable securities 25,000 Borrowing increases the venture's currently available cash. - 29,000 30,000 $ 1,000 The survival bottom line is that the venture's liquid resources went from $30,000 at founding to $1,000 by the end of its first six months and wouldn't be there without $25,000 in new debt. 1. Relative to 4.08, what is the: a. Cash from Operating Activities? b. Cash from Investing Activities? c. Cash from Financing Activities? d. Total net cash increase or decrease? e. Annual net cash burn? f. Monthly cash burn rate? g. Months to out of cash