Using the information provided by the Statement of Cash Flows, specify two questions that you would ask management if you were a financial analyst attempting to issue a buy / sell recommendation to clients. Explain why you would ask each question.

The Shelburne, Vermont, companys primary markets are New York, Boston, and Chicago. Sales have jumped dramatically in recent years. Such dramatic growth has significant implications for cash flows. Provided below are the operating sections of the most recent two years' statements of cash flows, along with summary information about investing and financing activities for those years:

			Current Year		Prior Year
Cash flow from operating activities:
	Net income		$17,523		$838,955
	Adjustments to reconcile net income to net
	Cash provided by operating activities
	Deferred income taxes		(69,524)		(146,590)
	Depreciation and amortization		316,416		181,348
	Changes in current assets and current liabilities:
	Accounts receivable, trade		(38,267)		(25,947)
	Inventories		(1,599,014)		(1,289,293)
	Prepaid and other current assets		(444,794)		(113,205)
	Deposits and other assets		(24,240)		(83,044)
	Accounts payable		2,017,059		(284,567)
	Accrued expenses		61,321		170,755
	Accrued interest payable, debentures				(58,219)
	Other				(8,960)
	Income taxes payable				117,810
	Net Cash provided by (used for)
	operating activities		236,480		(700,957)
	Net cash used for investing activities		(2,102,892)		(4,422,953)
	Net cash (used for) provided by financing activities		(315,353)		9,685,435
	Net change in cash and cash equivalents		(2,181,765)		4,561,525
Other Information:
	Current Liabilities		4,055,465		1,995,600
	Total Liabilities		4,620,085		2,184,386
	Net Sales		20,560,566		17,025,856