Assessing Asset and Investment Strategy Widgets, Inc. and Gizmos, Inc. both manufacture accessories for computer users. The table below shows their investment policies and operating results for the past two years.
|
Widgets, Inc. |
Gizmos, Inc. |
|||
|
(In thousands) |
2004 |
2003 |
2004 |
2003 |
|
Plant and equipment |
$2,400 |
$2,200 |
$4,300 |
$4,400 |
|
Accumulated depreciation |
600 |
580 |
2,200 |
1,900 |
|
Total assets |
5,000 |
4,300 |
8,000 |
8,100 |
|
Net income |
432 |
320 |
615 |
140 |
|
Depreciation |
320 |
290 |
520 |
541 |
|
Cash flow from operations |
710 |
644 |
105 |
376 |
|
Cash flow from investing activities |
305 |
274 |
205 |
56 |
|
New investment in plant and equipment |
316 |
280 |
180 |
220 |
Required Explain what the preceding numbers tell you about the two companies’ assets and investment policies. Include any information you find that would indicate financial problems within either company.