You are evaluating two companies as possible investments. The two companies, which are similar in size, are commuter airlines that fl y passengers up and down the West Coast. All other available information has been analyzed, and your investment decision depends on the statements of cash flows.

Requirement
Discuss the relative strengths and weaknesses of Blue Yonder Airlines and Horizon, Inc. Conclude your discussion by recommending one of the companies€™ stocks as aninvestment.

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Horizon, Inc. Statements of Cash Flows Years Ended September 30, 2013 and 2012 2013 2012 Operating activities: Net income $ 264,000 S 193,000 Adjustments for non-cash items: Total Net cash provided by operating activities 67,000 331,000 79,000 272,000 Investing activities: Purchase of property, plant, and equipment Sale of property, plant, and equipment Net cash used for investing activities S(395,000) 69,000 S(610,000) 119,000 (326,000) (491,000) Financing activities: Issuance of long-term n Payment of short-term notes payable Net cash provided by financing activities otes payable S 198,000 (95,000) S 131,000 (26,000) Increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year 103,000 S 108,000 176,000 $284,000 105,000 S (114,000) 290,000 $ 176,000