The consolidated statements of cash flows and related note disclosure for Big Rock Brewery Inc. are in Exhibits 5.22A and 5.22B.
EXHIBIT 5.22A Big Rock Brewery Inc.’s 2016 Consolidated Statements of Cash Flows

EXHIBIT 5.22B Excerpt from Big Rock Brewery Inc.’s 2016 Annual Report

Required 

a. In total, how much did Big Rock’s cash and cash equivalents change during 2016? Was this an increase or a decrease? How did this compare with the previous year?

b. How did Big Rock’s net income in 2016 compare with the cash flows from operating activities? What was the largest difference between these two amounts?

c. What effect did the change in the company’s accounts receivable have on cash flows from operating activities in 2016? What does this tell you about the balance owed by the company’s customers?

d. What effect did the change in the company’s accounts payable and accrued liabilities have on cash flows from operating activities in 2016? What does this tell you about the balance owed to these creditors?

e. Calculate Big Rock’s net free cash flow for 2016 and 2015. Is the trend positive or negative?

f. How did the dividends paid by Big Rock to its shareholders compare with the company’s net income and cash flows from operating activities?

g. If you were a user of Big Rock’s financial statements—a banker or an investor—how would you interpret the company’s cash flow pattern? How would you assess the risk of a loan to or an investment in Big Rock? Do you think the company is growing rapidly?

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Consolidated Statements of Cash Flows (in thousands of Canadian dollars) Year ended December 30 2015 2016 Note OPERATING ACTIVITIES Net loss for the year Items not affecting cash: Depreciation and amortization $ (453) $ (1,075) 2,559 2,388 Year ended December 30 Note 2016 2015 Gain on sale of assets (65) (111) Share-based compensation 385 90 Lease incentive 181 Deferred income tax expense (recovery) 233 (151) Net change In non-cash working capital related to operations 26 879 781 Cash provided by operating activities 3,543 2,103 FINANCING ACTIVITIES Increase in bank indebtedness 1,596 1,247 Proceeds from long-term debt 2,112 3,889 Dividend payments (1,375) Cash provided by financing activitles 3,708 3,761 INVESTING ACTIVITIES Purchase of property, plant and equipment (7,691) (6,643) Purchase of intangibles (36) (325) Proceeds from sale of equipment Cash used In Investing activitles Net decrease In cash Cash, beginning of year Cash, end of year 143 160 (7,584) (6,808) (333) (944) 540 1,484 $ 207 $ 540 Supplemental cash-flow Information Cash interest paid $ 357 $ 181 Cash taxes paid 57 241