Theater by Design and Show Cinemas are asking you to recommend their stock to your clients. Because Theater by Design and Show Cinemas earn about the same net income and have similar financial positions, your decision depends on their cash flow statements, summarized as follows:

Based on their cash flows, which company looks better? Give your reasons.

Transcribed Image Text:

Theater by Design Show Cinemas Net Cash Provided by Operating Activities $ 30,000 $ 70,000 Cash Provided by (Used for) Investing Activities: Purchase of Plant Assets S (20,000) $ (100,000) Sale of Plant Assets 40,000 20,000 10,000 (90,000) Cash Provided by (Used for) Financing Activities: Issuance of common stock 30,000 Paying off long-term debt (40,000) Net Increase (Decrease) in Cash 3 10,000 $ 10,000