Interpreting the Cash Flow Statement Embarcadero Company’s most recent statement of cash flows is shown on the next page.
Required Use Embarcadero’s statement of cash flows to answer the following questions.
A. What was the primary source of cash inflow for the company?
B. Why was the company able to report a net cash inflow from operations when it incurred a net loss for the period?
C. What were the primary uses of cash during the period?
D. Did Receivables, Inventories, and Accounts Payable increase or decrease during the year?
E. If revenues (as reported on the income statement) were $3,960 for the year, how much cash was collected from customers during the year?
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Embarcadero Company |
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Operating activities |
|
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Net loss |
($682) |
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Adjustments to reconcile NI to cash flows: |
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Depreciation and amortization |
592 |
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Noncash gains and losses, net |
136 |
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Changes in: |
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Accounts receivable |
172 |
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Inventories |
110 |
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Other current assets |
24 |
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Accounts payable |
98 |
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Other current liabilities |
148 |
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Cash provided by operations |
278 |
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Investing activities |
|
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Investments and acquisitions |
424 |
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Capital expenditures |
42 |
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Sales of investments |
206 |
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Cash used by investing activities |
260 |
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Financing activities |
|
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Increase in long term debt |
1,014 |
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Repurchase of common stock |
740 |
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Dividends paid |
402 |
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Cash provided by financing activities |
128 |
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Decrease in cash |
($110) |