DeliverItNow is a start-up operating in mid to large cities in the Eastern United States that coordinates food deliveries to businesses and individuals in a limited geographic area. Here is their Cash Flow Statement for the most recent quarter: 1. What is the Cash Flow from Operating Activities for DeliverItNow for the last 3 months? 2.Which of the following changes would be true about DeliverItNow?: Their revenues are negative Their revenues are greater than their expenses Their expenses are greater than their revenues Operations are generating positive cash flow None of the above. 3. What is DeliverItNow's Cash Flow from Investing Activities? 4. What is DeliverItNow's Net Cash Flow? 5. If DeliverItNow's Chief Financial Officer (CFO) was concerned about the company's negative cash flow and decided to sell shares of stock to make up the difference, how many shares would the company need to sell at a cost of $100 / share? 6. Why would a start-up company like DeliverItNow be likely to have negative net cash flow without issuing stock or borrowing funds?: Many start-ups have higher expenses than revenues at first Higher growth companies are likely to have increases in accounts receivable and inventory They are more likely to be making capital expenditures All of the above None of the above.

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
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DeliverItNow is a start-up operating in mid to large cities in the Eastern United States that coordinates food deliveries to businesses and individuals in a limited geographic area. Here is their Cash Flow Statement for the most recent quarter:

1. What is the Cash Flow from Operating Activities for DeliverItNow for the last 3 months?

2.Which of the following changes would be true about DeliverItNow?:

  1. Their revenues are negative
  2. Their revenues are greater than their expenses
  3. Their expenses are greater than their revenues
  4. Operations are generating positive cash flow
  5. None of the above.

3. What is DeliverItNow's Cash Flow from Investing Activities?

4. What is DeliverItNow's Net Cash Flow?

5. If DeliverItNow's Chief Financial Officer (CFO) was concerned about the company's negative cash flow and decided to sell shares of stock to make up the difference, how many shares would the company need to sell at a cost of $100 / share?

6. Why would a start-up company like DeliverItNow be likely to have negative net cash flow without issuing stock or borrowing funds?:

  1. Many start-ups have higher expenses than revenues at first
  2. Higher growth companies are likely to have increases in accounts receivable and inventory
  3. They are more likely to be making capital expenditures
  4. All of the above
  5. None of the above.
### Cash Flow Statement For 3 Months Ending June 30, 2015 ($000)

**Net Income**: -$284  
**Depreciation**: 300  
**Changes in Accounts Receivable**: -150  
**Changes in Inventory**: -200  

**Cash Flow (Operating Activities)**: ###

**Capital Expenditures**: -450  
**Investments**: $20  

**Cash Flow (Investing Activities)**: ###

**Dividends Paid**: 0  
**Sale/Purchase of Stock**: 0  
**Net Borrowings**: 200  

**Cash Flow (Financing Activities)**: 200

**Net Cash Flow**: ###

### Description

This Cash Flow Statement presents the detailed financial activities over a three-month period ending on June 30, 2015, specifically denoted in thousands of dollars ($000).

Key components are:

1. **Operating Activities**:
   - *Net Income*: Indicates the net earnings during the period, showing a loss of $284,000.
   - *Adjustments*: Depreciation, which is the decrease in value of assets, accounts for $300,000. Changes in accounts receivable and inventory contribute negative amounts of $150,000 and $200,000 respectively. 
   
2. **Investing Activities**:
   - Captures expenditures on long-term assets like capital expenditures ($450,000) and smaller investments ($20,000).

3. **Financing Activities**:
   - Details the cash provided through borrowing ($200,000) with no dividends paid or stock transactions.

The placeholders (###) indicate sections requiring additional data computation to derive the totals for cash flow from operating and investing activities, as well as the net cash flow.
Transcribed Image Text:### Cash Flow Statement For 3 Months Ending June 30, 2015 ($000) **Net Income**: -$284 **Depreciation**: 300 **Changes in Accounts Receivable**: -150 **Changes in Inventory**: -200 **Cash Flow (Operating Activities)**: ### **Capital Expenditures**: -450 **Investments**: $20 **Cash Flow (Investing Activities)**: ### **Dividends Paid**: 0 **Sale/Purchase of Stock**: 0 **Net Borrowings**: 200 **Cash Flow (Financing Activities)**: 200 **Net Cash Flow**: ### ### Description This Cash Flow Statement presents the detailed financial activities over a three-month period ending on June 30, 2015, specifically denoted in thousands of dollars ($000). Key components are: 1. **Operating Activities**: - *Net Income*: Indicates the net earnings during the period, showing a loss of $284,000. - *Adjustments*: Depreciation, which is the decrease in value of assets, accounts for $300,000. Changes in accounts receivable and inventory contribute negative amounts of $150,000 and $200,000 respectively. 2. **Investing Activities**: - Captures expenditures on long-term assets like capital expenditures ($450,000) and smaller investments ($20,000). 3. **Financing Activities**: - Details the cash provided through borrowing ($200,000) with no dividends paid or stock transactions. The placeholders (###) indicate sections requiring additional data computation to derive the totals for cash flow from operating and investing activities, as well as the net cash flow.
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