Top managers of Burley Guys Delivery Ltd. are reviewing company performance for 2017. The income statement reports a 20 percent increase in net income over 2016. However, most of the net income increase resulted from an unusual gain of $60,000 on the sale of equipment.
The cash proceeds were $180,000. The balance sheet shows a large increase in receivables.
The cash flow statement, in summarized form, reports the following:
Net cash outflow from operating activities ........ $(330,000)
Net cash inflow from investing activities .......... 300,000
Net cash inflow from financing activities ......... 150,000
Increase in cash during 2017 ......................... $ 120,000
Required
Write a memo to give the managers of Burley Guys Delivery Ltd. your assessment of 2017 operations and your outlook for the future. Focus on the information content of the cash flow data.