Sun- Rype Products Ltd. is a Canadian juice and fruit snack company based in Kelowna, British Columbia. Its statements of cash flows for fiscal years 2012, 2011, and 2010 are shown below:

Required:
1. The cash flows from operating activities show that depreciation is added to net income (loss) for the year. Is depreciation a source of cash? Explain.
2. Was the cash collected from customers during fiscal year 2012 higher or lower than Sun- Rype€™s sales revenue for that year? Explain.
3. Did Sun- Rype expand during 2011 and 2012? If so, how did the company pay for its expansion? Explain.
4. Compute and analyze Sun- Rype€™s quality of earnings ratio, capital expenditures ratio, and free cash flow for 2011 and 2012.
5. Analyze the company€™s pattern of cash flows from operating, investing, and financing activities over the three years. What conclusion can you draw from the changing pattern of cash flows? Explain.
6. Obtain a copy of Sun- Rype€™s statement of cash flows for the year 2013 through the company€™s website (www.sunrype.com) or the SEDAR service (www.sedar.com). Did the company€™s cash flow situation in 2013 improve or deteriorate relative to previous years? Explain.
7. As a potential investor in Sun- Rype€™s shares, what additional information would you need before making your decision as to whether or not to invest in this company€™s shares?

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SUN-RYPE PRODUCTS LTD Consolidated Statements of Cash Flows For the years ended December 31 (in thousands of Canadian dollars) 2012 2010 $ (5.687) 4,503 3,881 2011 Cash flows from operating activities 1,267 Net income (loes) for the year Adjustments for Depreciation Impairment loss Loss on disposal of property, plant, and equipment Unrealized foreign exchange loss (gain) Interest expense Income tax expense (recovery) 4,745 293 57 (552) 608 5,166 164 188 163 847 2.349 1779 69 826 SUN-RYPE PRODUCTS LTO Consolidated Statements of Cash Flows For the years ended December 31 in thousands of Canadian dollars) 2012 8,339 (324) 2,510 2010 10,514 1,977 (1.482) 173 (1.150) 146 2011 Change in trade and other receivables Change in inventories Change in prepayments Change in trade and other payables Change in provisions (2.885) 890 (6,122) 125) 1,865 651 6,077 Cash generated from operating activities (826) (163) Interest paid Income tax paid Net cash from (used in) operating activities Cash flows from investing activities 17.936 6.610 5.764 Business acquisitions Acquisition of property, plant, and equipment (9.087) (5,537) (1418 3,929 1852 1.418 13016) 7389 Net cash used in investing activities Cash flows from financing activities Advances of loans and borrowings Repayment of loans and borrowings 1,502 (14,264) 18,551 (1.282) 7,260 (4,867) Repurchase of own shares Net cash from financing activities 12859 17269 2.213 (2.357) Net increase (decrease) in cash Cash pesition, beginning of year 3,659 2,411 071) 2,928 Effect of exchange rate changes on cash Cash position, end of year $ 4,227 571