Take a look atthe cash flow profile of the company, and analysethe cash flow statement step by step through the following questions.

Derived Statement of Cash Flows (in $ thousand, some numbers are rounded)
For Years Ending December 31	2003	2004	2005	2006E
Net Income	1,293	1,279	1,488	1,534
Depreciation & Amortization	412	455	557	669
Change in Accounts Receivable	-920	-2,416	-3,465	-4,185
Change in Inventories	294	-406	-90	-556
Change in Accounts Payable	939	1,926	1,761	2,765
Operating Cash Flow	2,019	838	250	226
Investment in PP&E	-835	-734	-1,215	-1,398
Investment in Other Assets	0	0	0	0
Investment in Land	-1,300	-1,103	0	0
Investing Cash Flow	-2,135	-1,836	-1,215	-1,398
Debt Issuance	1,494	1,850	2,128	2,006
Retirement of Debt	-315	-352	-525	-730
Dividends	-226	-224	-298	-307
Financing Cash Flow	953	1,274	1,306	969
Change in Cash	837	276	340	-203

Question 1A:The company's profits have increased by ~30% from 2002 to 2006(E). How muchof the profits estimated for the year 2006(E) will translate to the 'cash flow from operations' for the same year? Which of the three categories in the cash flow statement has contributed majorly tothe decrease inthe 'change in cash' by the company from 2003to 2006(E)?

(Note: 'Change in cash' is the same as 'Total cash generated'. The (E) beside a year indicates that the figures are expected in the future, i.e. the case study analysis is taking placebefore the year.)

Question 1B:What isthe trend in cash flow from 'operating activities', 'investing activities' and 'financing activities' over the years?Identify at least onereason for the increase/decrease in each of the three categories of the cash flow statement.Explain your answer.(Note: Trend indicates whether the numbers are increasing/decreasing over the years)

Question 1C:Given below is the expected cash flow profile of the company for the year 2006(E).

500 0 -500 -1000 1500 Cash flow from Cash flow from Cash flow from Cash at end operating investing financing activities activities activities