Evaluating Income and Cash Flows Selected financial statement information is reported below for Office Decor Company. All amounts are in thousands.
|
For the Year Ended December 31, 2004 |
|
|
Sales revenue |
$11,200 |
|
Cost of goods sold |
6,400 |
|
Operating expenses |
2,800 |
|
Net income |
2,000 |
|
Dividends paid |
1,000 |
|
31 Dec |
2004 |
2003 |
|
Cash |
$1,340 |
$1,940 |
|
Accounts receivable |
4,600 |
2,200 |
|
Inventories |
9,400 |
5,000 |
|
Accounts payable |
3,800 |
2,600 |
|
Notes payable |
10,000 |
6,000 |
Required Prepare a statement of cash flows (indirect format) for Office Decor, assuming that all important cash flow activities are reflected in the information provided above. Examine the financial information presented for Office Decor Company. What financial problems do you see? What are some potential causes of these problems?