Please look at the table below. Comparing Knownow’s Cash Flow over the entire period of five years to their total profit for these five years – what could be said of their business model and behaviour in total? Please mention at least two reasons for your opinion!

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Knownow Inc. Cash flow Net Profit Increase /(Decrease)adjustments Cash In(out)flow 1 2 3 4 5 2011 0 40 20 30 90 2012 100 35 20 20 40 215 2013 10 25 -25 -20 20 50 60 2014 125 20 25 30 -20 180 2015 Explanation 180 40 -30 Add: Depreciation of vehicle--non-cas h expense debited to P& L a/c 220 Mktg.exp. ----S 25('000) Cash paid in 2 013 for 2014 (subtracted in 2013 & add ed in 2014 -to reflect actual cash outflo w made & cash outflow not made, in r espective yrs.) 30 Add: Infmn. System depn.--non-cash e xpense debited to P&L a/c 80%*25('000)=$ 20 ('000) cash ooutflo w tow. Interest not made in 2011, actu ally made in 2012 Add: Doubtful debt provision--non-cas h expense debited to P& La/c Knownow Inc. Cash flow Net Profit Increase /(Decrease)adjustments Cash In(out)flow 1 2 3 4 5 2011 0 40 20 30 90 2012 100 35 20 20 40 215 2013 10 25 -25 -20 20 50 60 2014 125 20 25 30 -20 180 2015 Explanation 180 40 -30 Add: Depreciation of vehicle--non-cas h expense debited to P& L a/c 220 Mktg.exp. ----S 25('000) Cash paid in 2 013 for 2014 (subtracted in 2013 & add ed in 2014 -to reflect actual cash outflo w made & cash outflow not made, in r espective yrs.) 30 Add: Infmn. System depn.--non-cash e xpense debited to P&L a/c 80%*25('000)=$ 20 ('000) cash ooutflo w tow. Interest not made in 2011, actu ally made in 2012 Add: Doubtful debt provision--non-cas h expense debited to P& La/c

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To analyze Knownow Incs business model and behavior based on the comparison of their cash flow and n... View the full answer