The following are the comparative statements of cash flows for Yellow Spruce Incorporated.

Required:
a. Discuss the company€™s ability to meet its non-operating needs for cash over these three years, and comment on the continuing nature of the major items that have appeared over this time period.
b. Comment on the changes in Yellow Spruce€™s accounts receivable, accounts payable, and inventory levels over these three years.
c. How did Yellow Spruce finance its repayment of long-term debt and its acquisition of property, plant, and equipment and investments in 2016?
d. Describe how the company€™s mix of long-term financing has changed during this three-year period, in terms of the proportion of debt versus equity. (Hint: Start by calculating the total amount of the increase or decrease in long-term debt, and comparing it with the total amount of the increase or decrease in shareholders€™ equity.)

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YELLOW SPRUCE INCORPORATED Statements of Cash Flows (in millions) 2016 2015 2014 Operating activities Net income Add back: $ 57 $ 98 Depreciation expense Loss (gain) on sale of investments 75 65 Effect of changes in working capital items: (38) (21) (39) (21) Accounts receivable 30 (17) 13 (12) 175 Inventory Prepaid expenses Accounts payable 27 35 Net cash inflow from operations Investing activities Acquisition of property, plant, and equipment Acquisitlon of investments Proceeds from sale of property, plant, and equipment 113 118 (152) (72) 27 (197) (154) (23) (161) (51) (161) (201) Net cash outlow for investing activities Financing activities Issuance of long-term debt Repayment of long term debt Issuance of shares Repurchase of shares Dividends paid 213 (131) 12 156 332 72) (93) Net cash inflow from financing activities Overall increase in cash Cash position at beginning of year Cash position at end of year (16) 78 30 100 130 (38) (14) 32 (84) (15) 140 61 94 S 100