You have been asked to evaluate two companies as possible investments. The two companies, Norfolk Industries Inc. and Strafford Crystal Limited, are similar in size. Assume that all other available information has been analyzed, and the decision concerning which company's shares to purchase depends on their cash flow data.

Requirement
Discuss the relative strengths and weaknesses of each company. Conclude your discussion by recommending one company's shares as an investment?

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Norfolk Industries Inc. Statement of Cash Flows For the Years Ended September 30, 2017 and 2016 2 3 Operating activities: 4 2017 2016 Net income 17,000 44,000 djustments for n Total Net cash (14,000) 3,000 (4,000) 40,000 6 ing activities 8 Investing activities: Purchase of Sale of Net cash t, and equipment (13,000) 86,000 $ (3,000) 79,000 10 lant, and e ent ided by investing activities 73,000 76,000 12 Financing activities: 13 Issuance of short-term notes payable 14 15 Net cash used for financing activities 16 Increase in cash 17 Cash balance at b 18 Cash balance at end of 19 43,000 (101,000) 19,000 (108,000) Payment of short-term notes (58,000) 18,000 31,000 5 49,000 (89,000) 27,000 4,000 ning of Strafford Crystal Limited Statement of Cash Flows For the Years Ended September 30, 2017 and 2016 2017 2016 rating activities: Net income Adjustments for non-cash items: $ 89,000 $ 71,000 19,000 Net cash ing activities 108,000 71,000 8 Investing activities: Purchase of plant, and equipment $(121.000 $(91,000) Net cash used for investing activities (121,000) 91,000) 11 Financing activities: Issuance of long-term notes p 46,000 Payment of short-term notes payable Payment of cash dividends Net cash provided by (used for) 43,000 (40,000) 9,000) 14 (12,000) 15 financing activities 16 Increase 17 Cash balance at beginning of year 18 Cash balance at end of year 19 19,000 6,000 54,000 60,000 (6,000) (26,000) 80,000 54,000 (decrease) in cash