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?