Problem 12-3 Statement of Cash Flows - Direct Method

Problem 12-4 Statement of Cash Flows - Indirect Method

Statement of Cash Flows - Direct Method The president has asked you some questions about the year's results. She is very impressed with the profit margin of 18% (net income divided by sales revenue). She is bothered, however, by the decline in the company's cash balance during the year. One of the conditions of the existing, bank loan is that the company maintain a minimum cash balance of $50,000. Required Prepare a statement of cash flows for 2012 using the direct method in the Operating Activities section. On the basis of your statement in part (1), draft a brief memo to the president to explain why cash decreased during such a profitable year. Include in your explanation any recommendations tor improving the company's cash flow in future years