Market Star is a marketing services firm that creates advertising copy for clients and places the advertising in television, magazines, and other media. Accounts receivable represent amounts owed by clients, and accounts payable represent amounts payable to various media. Market Star has purchased other marketing services firms in recent years. Selected data for Market Star for three recent years appear next (amounts in millions of US$):

a. Prepare a comparative statement of cash flows for Market Star for the three years. Use the indirect method of computing cash flow from operations.
b. Discuss the relation between net income and cash flow from operations and the pattern of cash flows from operating, investing, and financing activities during the threeyears.

  • CreatedMarch 04, 2014
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