This assignment aims at developing an understanding of students on different aspects of a cash flows statement as well as what information can be derived from the cash flows statement. Students will learn how to prepare the statement of cash flows using direct and indirect method,
understand why a company may have reported profit but negative cash flows, and form the ability to look into the profit figure in conjunction with the cash flows information so as to get a complete picture. Hence this assignment helps students to learn how to prepare, present,
analyse and synthesise cash flow related data and information for a company or for a corporate group
(b) Explain how Aggressive Corporation can have positive net income but negative operating cash flows.
(c) How does the finding of negative operating cash flows affect your confidence in the reliability of the net income amount?
(d) Why do you think Larry mentioned the potential employment position? Should the potential employment position with Aggressive Corporation have any influence on the loan decision?