Below are summarized cash flows for two companies. Both companies are mature companies in the same industry

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Below are summarized cash flows for two companies. Both companies are mature companies in the same industry and both began and finished the year with the same amount of cash. Evaluate the two companies€™ situations regarding their cash flows. Which do you think shows a stronger cash flow and liquiditysituation?

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Financial Accounting A Critical Approach

ISBN: 978-1259066528

4th edition

Authors: John Friedlan

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Question Posted: Feb 26, 2015 12:15 PM

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Below are summarized cash flows for two companies. Both companies are mature companies in the same industry

Question:

Cash at the beginning of the year Operating cash flows Investing cash flows Financing cash flows Cash at the end of the year Company A $550,000 (28,000) 95,000 60,000 $677,000 Company B S550,000 298,000 (50,000) (121,000) S677,000

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Despite beginning and ending the year with identical cash balances Company A and Company B are very ...View the full answer

Financial Accounting A Critical Approach

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