Question:
You are evaluating two companies as possible investments. The two companies, similar in size, are commuter airlines that fly passengers up and down the West Coast. All other available information has been analyzed and your investment decision depends on the statements of cash flows.
Requirement
1. Discuss the relative strengths and weaknesses of Friendly and Cloudview. Conclude your discussion by recommending one of the companies stocks as aninvestment.
Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...
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Friendly Airlines Statements of Cash Flows Years Ended November 30, 2011 and 2010 2011 2010 Net income (net loss) Adjustments for noncash items Total Net cash provided by operating activities.... S (48,000) 5121,000 60,000 12,000 (10,000 111,000 Investing activities: Purchase of property, plant, and $(106,000) Sale of long-term investments Net cash provided by (used for) 44,000 investinEa (7,000) (99,000) Financing activities: Issuance of short-term notes payable. Payment of short-term notes payable. Payment of cash dividends. Net cash used for financing activities... S 165,000 (139,000) ble.(186,000) 39. Increase (decrease) in Cash balance at beginning of year Cash balance at the end of year. (75,000 s (70,000) 80,000 S 10,000 (44,000 S (32,000) 112,000 S 80,000 Cloudview, Inc. Statements of Cash Flows Years Ended September 30, 2011 and 2010 2011 2010 Operating activities: Ner income $ 200,000 146,000 Adjustments for noncash items 51,000 251,000 Total 60,000 206,000 Net cash provided by operating activities Investing activities: Purchase of property, plant, and equipment299,000) Sale of property, plant, and equipment..52,000 Net cash used for investing activities $(462,000) 0,000 (247,000) (372,000) Issuance of long-term notes payable Payment of short-term notes payable... Net cash provided by financing activitics 150,000 72,000) S 99,000 (20,000) 78,000 S 82,000 133,000 S215,000 79,000 $ (87,000) 220,000 133,000 Cash balance at beginning of year at end of year.