Using the excerpt from the Ralston Company statement of cash ...

[james9437]

Using the excerpt from the Ralston Company statement of cash flows analyze thoroughly the cash flow from operating activities. Be sure to offer possible reasons for the changes identified.
 
  Operating Activities 2015 2014
  Net income 175,000 137,000
  Depreciation and amortization 28,500 23,200
  Deferred income taxes 7,600 4,100
  Equity in gains of investees 3,300 1,100
  Increase (decrease) in cash resulting from changes in:
   Accounts receivable (6,500) (66,700)
   Inventories 35,600 (53,900)
   Accounts payable and accrued expenses 43,400 (5,000)
  Net cash provided (used) by operating activities 286,900 (39,800)
 
 
 What will be an ideal response?

Question 2

The number of exemptions claimed on a W-4 form helps to determine the federal income tax withholding.
  Indicate whether the statement is true or false

[lauravaras]

Answer to Question 1

Ralston Company generated negative cash flows from operations (CFO) despite a positive net income in 2014 . In 2015 the firm was able to increase its net income from 2014 and cash from operations increased to a positive amount greater than net income for the year. Accounts receivable increased both years but especially in 2014, causing CFO to be lower. Inventories increased significantly in 2014, but declined in 2015 . Accounts payable and accrued expenses were paid down in 2014, but increased significantly in 2015 which contributed to the larger CFO. The large increases in accounts receivable and inventory in 2014 combined with increased net income, a smaller increase in accounts receivable and a large decrease in inventories suggest the firm may be expanding.

Answer to Question 2

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[james9437]

Thanks for the timely response, appreciate it

[elyse44]

Great answer, keep it coming