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Terms of the number of units that will have to be sold next year. [Statement of Cash Flows and Cash Bum or Build] Cindy and
Terms of the number of units that will have to be sold next year. [Statement of Cash Flows and Cash Bum or Build] Cindy and Robert (Rob) Castillo founded the Castillo Products Company in 2015. The company manufactures components for personal decision assistant products and for other handheld electronic products. Year 2015 proved to be a test of the Castillo Products Company's ability to survive. However, sales increased rapidly in 2016, and the firm reported a net income after taxes of $75,000. Depreciation expenses were $40,000 in 2016. Following are the Castillo Products Company's balance sheets for 2015 and 2016. A. Calculate Castillo's cash flow from operating activities for 2016. B. Calculate Castillo's cash flow from investing activities for 2016. C. Calculate Castillo's cash flow from financing activities for 2016. D. Prepare a formal statement of cash flows for 2016 and identify the major cash inflows and outflows that were generated by the Castillo Products Company. E. Use your calculation results from Parts A and B to determine whether Castillo was building or burning cash during 2016 and indicate the dollar amount of the cash build or burn. F. If Castillo had a net cash burn from operating and investing activities in 2016, divide the amount of burn by 12 to calculate an average monthly bum amount. If the 2017 monthly cash bum continues at the 2016 rate, indicate how long in months it will be before the firm runs out of cash if there are no changes in financing activities
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