Microsoft Word - FA_CF_AND_RATIOS_.docxFORMATIVE ASSIGNMENT FINANCIAL STATEMENTS ANALYSIS CASH...

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Microsoft Word - FA_CF_AND_RATIOS_.docxFORMATIVE ASSIGNMENT FINANCIAL STATEMENTS ANALYSIS    CASH FLOW STATEMENTS. EXERCISE 1  I. The following comparative balance sheets and income statement are available for ABC Inc. Calculate a statement of cash flows for 2016 using the indirect method (CFO, CFF and CFI) and analyze the statement.        CASH FLOW STATEMENTS. EXERCISE 2. COMPANY XYZ  Analyze the statement of Cash Flows for XYZ             RATIO ANALYSIS. EXERCISE 3. COMPANY XYZ  The new owners of Indomie Foods Inc. have hired you to help them diagnose and cure problems that the company has had in maintaining adequate liquidity. As the first step, you perform a liquidity analysis. You then do an analysis of the company’s short-term activity ratios. Your calculations and appropriate industry norms are listed.    What recommendations could you make to the new owners?

Preeta · Accepted Answer

Exercise 1:    
                                                  Cash Flow Statement for ABC Inc.
                                                             For the year ended 2016
Cash flows from operating activities:
Net income	 							$ 6,200
  (+) Depreciation					$500
	 							$ 6,700
  (-) Increase in trade receivables		 	$500
  (-) Increase in inventories		 	$6,900
 (+) Increase in accounts payables		 	$ 800
 (+) Increase in accrued liabilities		 	$ 100
 (+) Increase in income tax payable		 	$ 300
										($6,200)
Cash generated from operations	     $ 500
Cash flows from investing activities:

Microsoft Word - FA_CF_AND_RATIOS_.docx FORMATIVE ASSIGNMENT FINANCIAL STATEMENTS ANALYSIS CASH FLOW STATEMENTS. EXERCISE 1 I. The following comparative balance sheets and income statement are...

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