The statement of cash flows for Walters Ltd. is presented below:

WALTERS LTD.

Statement of Cash Flows

Year Ended December 31, 2022

Operating activities

Net income $36,000

Adjustments to reconcile net income to net

cash used by operating activities

Gain on disposal of equipment $(4,000)

Depreciation expense 22,000

Increase in accounts receivable (30,000)

Increase in inventory (53,000)

Increase in accounts payable 24,000 (41,000)

Net cash used by operating activities (5,000)

Investing activities

Proceeds from sale of equipment $7,000

Net cash provided by investing activities 7,000

Financing activities

Repayment of bank loans $(11,000)

Dividends paid (8,000)

Repurchase of common shares (12,000)

Net cash used by operating activities (31,000)

Net decrease in cash (29,000)

Cash, January 1 20,000

Bank overdraft, December 31 $(9,000)

Required:

Evaluate the companys statement of cash flows. Provide a detailed explanation on the key findings and the implication for the company?