SPECIAL PROBLEM Below is a simplified, partial Statement of Cash Flows. Although the data is fictitious, it is based on a real life situation. STATEMENT OF CASH FLOWS (in thousands) Cash flows from operating activities nc Adjustments to reconcile net income to net cash (used) provided by operating activities: Depreciation Changes in assets and liabilities: 6,000 Accounts receivable, net Inventories Other current assets 28,000) 30,000) 3,000 1,000 48,000 8,000 Net cash provided (used) by operating activities Cash flows from investing activities: Sales (Purchases) of marketable securities, net Acquisition of property,plant and equipment 2,000 11,000) Net cash provided used) by investing activities9,000) Cash flows financing activities: 50,000 1,000) 21,000 10,000 60,000 Net proceeds from issuance of common stock Purchase of treasury stock Bank borrowings Dividends paid Net cash provided (used) by financing activities 43,000 Net change in cash during perioc 69 ACTION REQUIRED BY STUDENTS. -Are you satisfied with the Net Income of the corporation? -Do you have any comments on the quality of the Net Income? -Cash for the year increased by $43000. Are you satisfied with this? Why? -Solely conconsidering the data reflected in the Statement of Cash Flows is this a corporation you may be interested in buying its stock? 70 -If you were hired to be the CFO of this corporation can you anticipate what would be some of your initial steps/action plan based on the data reflected in the above Statement of Cash Flows? 71