MC Qu. 9 Statement of Cash Flows Ann\'s Flowers Inc. reported 2008... Statement

Question

MC Qu. 9 Statement of Cash Flows Ann's Flowers Inc. reported 2008...

Statement of Cash Flows Ann's Flowers Inc. reported 2008 net income of $1.30 million and depreciation of $253,000. The top part Ann's Flowers, Inc.'s 2007 and 2008 balance sheets is listed below (in millions of dollars).

6.30

5.15

9.69

7.42

What is the 2008 net cash flow from operating activities for Ann's Flower's, Inc.?

  Current assets: 2007 2008   Current liabilities: 2007 2008   Cash and marketable securities $3.30 $2.15   Accrued wages and taxes $1.03 $1.03   Accounts receivable 4.15 5.30   Accounts payable 3.03 4.15   Inventory

6.30

5.15

  Notes payable

9.69

7.42

  Total $13.75 $12.60   Total $13.75 $12.60

Explanation / Answer

CFO = Net Income + Depreciation - Increase in Current assets (except cash) + Increase in Current Liabities

CFO (in mil) = 1.3 + 0.253 - (6.30 - 5.15) + (5.30 - 4.15) + (9.69 - 7.42) - (4.15 - 3.03)

CFO (in mil) = $2.703 mil

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