• This week, we learned how to prepare a statement of cash flows from information on the balance sheet and income statement. If this is possible, why are managers required to provide a statement of cash flows? Also, how is the statement of cash flows linked to each of the other financial statements (income statement and balance sheet). How are the other financial statements linked with each other?
• A company president remarked, The operations of our company are such that we can take advantage of only a minor amount of financial leverage. Explain the likely reasoning the company president had in mind to support this statement.