Little Bit Inc.
Statement of Cash Flows
For Year Ended December 31, 2009
Cash flow from operating activities:
Net income $ 5,500
Non-cash expenses included in net income:
Depreciation $ 18,000
Deferred income taxes 500
Cash provided by (used for) current assets and liabilities:
Accounts Receivable $ 6,500
Inventory ...view middle of the document...
and above shows their cash inflow and out flow from operating, financing and investing activities. First of all as you can see their cash increase was more than their cash outflow of $16,000 which did resulted in the end of a cash closing balance of $40,000.
They are being supported directly by long term debt and the sale of common stock that is a combine total of $32,000. Their debt will get bigger if they don’t generate any cash from their operating activities, in which they have too much of inventories, accounts receivables and prepaid expenses, and being combined with payments of accrued liabilities. Also, by them using long term debt only for plant and equipment it has to also cover the negative cash flow from their operations.