Business

Donna C. Francis Financial Analysis

Indirect Method

Lllini Law Company

Statement of Cash Flows

December 31, 2001

Cash flow from operating Activities

Net Income $10,000

Adjustment to reconcile net income

Depreciation Expense $8000

Decrease in Accounts receivables $4000

Increase in Inventory (7000)

Decrease in Accounts payable (4000)

Loss of sale of equipment $2000 $ 3,000

Net cash provided by operating activities $13000

Cash flows from Investing Activities

Purchase of property, plant , equipment ($62,000)

Sale of equipment 28,000

Net cash used by investing activities ($34,000)

Cash flows from financing activities

Issuance of common stock $32,000

Issuance of Long-term notes (bonds) $12,000

Cash dividends ($8,000)

Net cash from financing activities 36,000

Net increase in cash 15,000

Cash at the beginning of year 38,000

Cash at end of year $53,000

Direct method

Lllini Law Company

Statement of Cash Flows

December 31, 2001

Cash flows from Operation activities

Cash receipts from customers $154,000

Cash Payments

Cash to suppliers ($121,000)

Operating expenses ( 20,000) ($141,000)

Net cash provided by operating activities $ 13,000

Cash flows from Investing Activities

Cash sale of equipment 28,000

Purchase of machinery (62,000)

Net cash from investing activities $34,000

Cash flow from financing activities

Issuance of common stock 32,000

Issuance of long-term note 12,000

Dividends paid ( 8,000)

Net cash provided by financing activities $36,000

Net cash increase $15,000

Cash at beginning of the year $38,000

Cash at the end of year $53,000

Free Cash Flows

Cash provided by operating expenses...