Top managers of Culinary Imports are reviewing company performance for 20X7. The income statement reports a 15% increase in net income, the fifth consecutive year showing an income increase above 10%. The income statement includes a nonrecurring loss without which net income would have increased by 16%. The balance sheet shows modest increases in assets, liabilities, and stockholders' equity. The assets posting the largest increases are plant and equipment because the company is halfway through a 5-year expansion program. No other asset and no liabilities are increasing dramatically. A summarized version of the cash flow statement reports the following:

Required
Write a memo giving top managers of Culinary Imports your assessment of 20X7 operations and your outlook for the future. Focus on the net income and the cash-flow data.

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Net cash provided by operating activities310,000 Net cash used for investing activities Net cash provided by financing activities Increase in cash during 20X7 ......... (290,000) 50,000 $ 70,000