Discuss the importance of the statement of cash flows as an analytical took for users of

1.     Discuss the importance of the statement of cash flows as an analytical took for users of financial statements.

2. Explain the meaning of the three categories of a statement of cash flows:

operating, investing and financing activities. Give an example of an inflow and an outflow for each category.

2.     Identify the following items as operating (O), Investing (I), or financing (F) activities.

a. Property, plant and equipment                  

b. Current maturities of long-term debt       

c. Inventories                                                 

d. Accounts receivable                                  

e. Common Stock                                          

f. Short-term debt                                          

g. Accounts payable                                      

h. Net Income                                                

i. Accumulated depreciation                         

j. Dividends                                                   

4. Explain how it is possible for a firm with a positive net profit to generate negative cash flow from operating activities.