Using the information provided and the statement of cash flows for Year 5 in Exhibit 6.17, identify any signals before the turnaround effort that Sunbeam was experiencing operating difficulties and was in need of restructuring.

Using information in the statement of cash flows for Year 6, identify indicators of the turnaround efforts and any relations between cash flows that trouble you.

Using information in the statement of cash flows for Year 7, indicate any signals that the firm might have engaged in aggressive revenue recognition and had not yet fixed its general operating problems.

Exhibit 6.17. Sunbeam Corporation Statement of Cash Flows (amounts in millions) (Problem 6.22) OPERATIONS Net income (loss) $ 109.4 5(2283) S 505 Depreciation and amortization 38.6 47.4 44.2 Restructuring and asset Impairment charges 283.7 Deferred Income taxes 578 (778) 25.1 Other additions 13.7 46.2 108 Other subtraction: (846) (27.1) (21]) (Increase) Decrease in accounts receivable (84.6) (138) (45) (Increase) Decrease in Inventories (1008) (1 I .6) (43) (Increase) Decrease In prepayments (9.0) 2.7 (88) Increase (Decrease) In accounts payable (1.6) 14.7 92 Increase (Decrease) in other current liabilities 52.8 (21.9) (18A) Cash Flow from Operations S (8.3) S 14.2 S 815 INVESTING Fixed assets acquired 5 (58.3) S (753) 5040.1) Sale of businesses 91.0 653 Acquisitions of businesses (.9) (33.0) Cash Flow from hvesting S 32.7 S (76.2) 50074) FINANCING Increase (Decrease) in short-term borrowing S 5 0 S 30.0 S 40)) Increase In long-menu debt 115 issue of common stock 26.6 92 9B Decrease In Iongterm debt (122) (18) (5A1) Acquisition of common stock (13.0) Dividends (3A) (3.3) (33) Other firming transactions 5 (A) (2) Cash Flow from Finandng S 16.5 S 45.2 S 27.9 Change InCaslI S 40.9 S (168) S 2.0 Cashaeginning of year 11.5 28.3 263 CashEnd onear 5 52.4 S 11.5 S 283 Source: Sunbeam Corporation, Form 10K for the Fiscal Year Ended December 28, 1997