You have been asked to evaluate two companies as possible investments. The two companies, Norfolk Industries Inc. and Strafford Crystal Limited, are similar in size. Assume that all other available information has been analyzed, and the decision concerning which company's shares to purchase depends on their cash flow data.

Requirement
Discuss the relative strengths and weaknesses of each company. Conclude your discussion by recommending one company's shares as an investment.

Norfolk Industries Inc. Statement of Cash Flows For the Years Ended September 30, 2014 and 2013 2014 2013 Operating activities: Net income $ 17,000 $44,000 Adjustments for non-cash items: Total Net cash provided by operating activities. (14,000) 3,000 (4,000) 40,000 Investing activities: Purchase of property, plant, and equipment.13,000) Sale of property, plant, and equipment Net cash provided by investing activities. Issuance of short-term notes payable Payment of short-term notes payable Net cash used for financing activities S (3,000) 79,000 86,000 73,000 76,000 Financing activities: 43,000 (101,000) 19,000 (108,000) Increase in cash Cash balance at beginning of year Cash balance at end of vear 58,000) 18,000 31,000 $ 49,000 (89,000) 27,000 4,000 $ 31,000 Strafford Crystal Limited Statement of Cash Flows For the Years Ended September 30, 2014 and 2013 2014 2013 Operating activities: Net income $ 89,000 $71,000 Adjustments for non-cash items: Total Net cash provided by operating activities. Purchase of property, plant, and equipmen 19,000 108,000 71,000 Investing activities: ent. (121,000) (91,000) Net cash used for investing activities (121,000) (91,000) Financing activities Issuance of long-term notes payable Payment of short-term notes payable Payment of cash dividends Net cash provided by (used for) financing activities. 46,000 (15,000) (12,000) 43,000 (40,000) (9,000) Increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year 19,000 6,000 54,000 60,000 (6,000) (26,000) 80,000 54,000