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    Which companies are likely to need additional cash inflows?

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    Lee wants to know if he will have to keep putting cash into companies after he purchases them. Here are three companies Lee has identified as potential acquisitions along with the information from the most recent cash flow statements (see attached excel sheet). All of these companies have a very small current cash balance. Which company is least likely to need additional cash inflows from Lee in order to continue to operate over the next several years? Explain briefly why (one or two sentences).

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    Solution Preview

    In order to operate without needing additional cash flows, you need to generate ...

    Solution Summary

    Students often have trouble understanding and interpreting the items in the cash flow statement. This problem offers practice in this important area.