Refer to the information about Bonanza provided in Problem P12-16. You are an investment analyst for Remigny Venture Capital. Remigny raises capital from individual investors and invests in promising small businesses, with the expectation that the businesses will grow and that it will ultimately be able to sell the investments at a profit. The president of Bonanza has approached your organization to make a significant equity investment in the company.

Required:
Prepare a report to Remigny's executive board analyzing Bonanza's performance over the last few years and assessing its attractiveness as an investment. What additional information would you want before reaching a final decision on whether to invest? In your analysis consider Bonanza's cash flow.