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

Section: Chapter Questions

Problem 32BE

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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?:

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.

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
Sale/Purchase of Stock
Net Borrowings
200
Cash Flow (Financing Activities)
200
Net Cash Flow
###

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