Evaluating Income and Cash Flows Selected financial statement information is reported on the next page for Beltway Distributors, Inc.
Required
A. Prepare a statement of cash flows (indirect format) for Beltway Distributors, assuming that all important cash flow activities are reflected in the information provided.
B. Assume this has been the pattern of cash flows for several years. What does this imply about the firm’s business situation?
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For the Fiscal Year Ended January 30, 2004 |
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Sales revenue |
$35,400 |
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Cost of goods sold |
22,700 |
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Operating expenses (except depreciation) |
4,500 |
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Depreciation expense |
2,900 |
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Net income |
5,300 |
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Dividends declared and paid |
5,000 |
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For January 30 |
2004 |
2003 |
|
Cash |
$2,050 |
$1,950 |
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Accounts receivable |
8,600 |
13,400 |
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Inventories |
23,500 |
27,100 |
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Accounts payable |
8,600 |
8,800 |
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Bank loan payable |
18,700 |
30,000 |