Top managers of Domino Delivery Ltd. are reviewing company performance for 2014. The income statement reports a 20-percent increase in net income over 2013. 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 2014.................................................$ 120,000
Required
Write a memo to give the managers of Domino Delivery Ltd. your assessment of 2014 operations and your outlook for the future. Focus on the information content of the cash flow data.