Question

(in thousands)	Fraser			Singh			Travis
Cash inflow (outflow) from operating activities	$	61,000		$	53,000		$	(27,800)
Cash inflow (outflow) from investing activities:
Proceeds from sale of plant and equipment								25,800
Purchase of plant and equipment		(31,000)			(31,000)
Cash inflow (outflow) from financing activities:
Proceeds from issuance of debt								23,400
Repayment of debt		(6,200)
Net increase (decrease) in cash		23,800			22,000			21,400
Average assets		637,000			517,000			317,000

Required:
Which of the three competing corporations is in the strongest relative position as indicated by their comparative statements of cash flows?

	Fraser
	Singh
	Travis

Answer 1

Travis have a negative operating cash flow, also it is selling its plant and equipment and issuing debt, which is
not a good sign for the liquidity of the company.Hence the Travis is weaker as compared to other two.
Now we have to compare Fraser and singh.
As we can see that there is a repayment of debt of $6,200 by Fraser company and still after that its net cash inflow is
higher than singh due to its cash inflow from operating activities.Hence we can conclude that Fraser company
is relatively better company on the basis of cash flow statement than singh company and obviously Travis company
So Fraser is the answer