The following (summary) statement of cash flows has been provided by Sigma Designs, which specializes in diversified graphic systems, document
The following (summary) statement of cash flows has been provided by Sigma Designs, which specializes in diversified graphic systems, document imaging, and multimedia markets.
Sigmo Designs, Inc. Statement of Cash Flows (abbreviated) For the Years Ended January 31, 1995 and 1994
a. Explain and discuss each item that resulted in a change in cash for Sigma Designs.
b. Based on this information, evaluate Sigma's future prospects.
c. Did Sigma use the direct or indirect method? What evidence indicates which method Sigma used?
d. With reference to the data in this assignment, and in the preceding assignment (5-42), prepare a graph showing the trends in Sigma Designs’ cash flow from operations. On the same graph, show Sigma's net income (loss). Discuss these trends, along with your estimate of Sigma's future prospects.
e. Write a short memo to Sigma Designs’ controller regarding the effects of net losses on operating cash flows during the period 1992 through 1995. Evaluate the dramatic turnaround in Sigma's cash balances. What factors caused this reversal (1992-95)?