Elements of the Statement of Cash Flows

Eat at My Restaurant - Cash Flow

Read and complete case study 10-10, "Eat at My Restaurant". Address the following elements, which are also "required" elements at the end of the case study:

Comment on the difference between net cash provided by operating activities and net income. Speculate on which number is likely to be the better indicator of long-term profitability.

Comment on the data reviewed for each firm.

Do any of these firms appear to have a cash flow problem?

Your answers should be in an essay form with an introduction and conclusion; ensure you are addressing each element clearly and thoroughly, following these guidelines:

Requirement (a) of the problem should be answered in general terms; you do not need to consider the 3 firms in the case. However, you do need to make a choice and rationalize that choice.

When addressing requirement (b), you should make AT LEAST 4 observations on each firm, focusing on the cash flow ratios provided.

All information should be considered when answering requirement (c). Even if you don't think any one company is in "trouble," you should still choose a company and support your choice.