Using a Statement of Cash Flows
Auto Supply Company’s 2011 statement of cash flows appears in Exhibit 13–8. Study the statement and respond to the following questions:
a. What was the company's free cash flow in 2011?
b. What were the major sources and uses of cash from financing activities during 2011? Did the net effect of financing activities result in an increase or a decrease in cash during the year?
c. What happened to the total amount of cash and cash equivalents during the year? Assuming 2011 was a typical year, is the firm in a position to continue its dividend payments in the future? Explain.
d. Look at the reconciliation of net income to net cash provided by operating activities, and explain the following:
1. Net loss (gain) from the sale of marketable securities.
2. Increase in accounts receivable.
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