The following information was taken from the most recent statement of cash flows of Innovative Electronics Company:
Net cash provided by operating activities ....... $ 845,000
Net cash used by investing activities ....... $ (530,000)
Net cash provided by financing activities ...... $1,675,000
1. What information do these subtotals from the statement of cash flows tell you about Innovative Electronics Company?
2. What additional information would you want to see before you analyze Innovative Electronics Company’s ability to generate positive operating cash flows in the future?
3. Did Innovative Electronics have a positive net income for the period? What information would you like to see to help you predict next year’s net income?