1. Given the information provided by the financial statements, what would you tell Mary Abrahams? (As part of your answer, calculate the firm's cash flows.)

2. How would you describe the cash flow pattern for the Maitz Company?

Income Statement for the Maitz Company for 2011 $175,000 (105.000) $ 70,000 Sales Cost of goods sold Gross profits Operating expenses: Depreciation Administrative expenses Selling expenses Total operating expenses Operating profits Interest expense Profits before taxes $ 5,000 20,000 26,000 S (51,000) $ 19,000 (3,000) $ 16,000 (8,000) $ 8000 Taxes Net profits Balance Sheets for the Maitz Company for 2010 and 2011 Assets 2010 2011 Current assets: $ 8,000 $ 10,000 20,000 Cash Accounts receivable 15,000 Inventory Total current assets 22,000 $45,000 25,000 $ 55,000 Fixed assets: Gross fixed assets Accumulated depreciation Net fixed assets $ 55,000 (20,000) $ 35,000 10,000 $100.000 $50,000 (15,000) $35,000 12.000 $92.000 Other assets TOTAL ASSETS