NEED A PERFECT PAPER? PLACE YOUR FIRST ORDER AND SAVE 15% USING COUPON:

case study In your 2-3 page analysis, be sure to thoroughly answer the questions presented with a strong supporting rationale. Be sure to compose your anal

case study In your 2-3 page analysis, be sure to thoroughly answer the questions presented with a strong supporting rationale. Be sure to compose your anal

Click here to Order a Custom answer to this Question from our writers. It’s fast and plagiarism-free.

case study In your 2-3 page analysis, be sure to thoroughly answer the questions presented with a strong supporting rationale. Be sure to compose your analysis in APA format with a title page, introduction, and conclusion. 
If applicable, include:

references cited in text and in the reference section
appropriate calculations and critical thought
the financial statement of cash flows and the accounting statement of cash flows
any additional documentation or information to support your analysis Mini Case

Cash Flows at Warf Computers, Inc.

Warf Computers, Inc., was founded 15 years ago by Nick Warf, a computer programmer. The small initial investment to start the company was made by Nick and his friends. Over the years, this same group has supplied the limited additional investment needed by the company in the form of both equity and short- and long-term debt. Recently the company has developed a virtual keyboard (VK). The VK uses sophisticated artificial intelligence algorithms that allow the user to speak naturally and have the computer input the text, correct spelling and grammatical errors, and format the document according to preset user guidelines. The VK even suggests alternative phrasing and sentence structure, and it provides detailed stylistic diagnostics. Based on a proprietary, very advanced software/hardware hybrid technology, the system is a full generation beyond what is currently on the market. To introduce the VK, the company will require significant outside investment.

Nick has made the decision to seek this outside financing in the form of new equity investments and bank loans. Naturally, new investors and the banks will require a detailed financial analysis. Your employer, Angus Jones & Partners, LLC, has asked you to examine the financial statements provided by Nick. Here are the balance sheets for the two most recent years and the most recent income statement:

Page 41

WARF COMPUTERS Balance Sheets ($ in thousands)

2018

2019

2018

2019

Current assets

Current liabilities

Cash and equivalents

$   469

$   542

Accounts payable

$   582

$   623

Accounts receivable

802

859

Accrued expenses

     481

     296

Inventories

795

769

Total current liabilities

$1,063

$   919

Other

       94

     110

Long-term liabilities

Total current assets

$2,160

$2,280

Deferred taxes

$   191

$   257

Fixed assets

Long-term debt

  1,379

  1,415

Property, plant, and equipment

$3,815

$4,978

Total long-term liabilities

$1,570

$1,672

Less accumulated depreciation

  1,310

  1,608

Stockholders’ equity

Net property, plant, and equipment

$2,505

$3,370

Preferred stock

$     25

$     25

Intangible assets and others

     851

     953

Common stock

151

155

Total fixed assets

$3,356

$4,322

Capital surplus

934

949

Accumulated retained earnings

1,924

3,112

Less treasury stock

     151

     230

Total equity

$2,883

$4,011

Total assets

$5,516

$6,602

Total liabilities and shareholders’ equity

$5,516

$6,602

WARF COMPUTERS Income Statement ($ in thousands)

Sales

Cost of goods sold

Selling, general, and administrative expense

Depreciation

Operating income

Other income

EBIT

Interest expense

Pretax income

Taxes

    Current: $559

    Deferred: $66

Net income

Dividends

Retained earnings

$9,068

5,347

848

     298

$2,575

       90

$2,665

     164

$2,501

  625

 

           

$1,876

$   688

$1,188

Nick also has provided the following information: During the year the company raised $274,000 in new long-term debt and retired $238,000 in long-term debt. The company also sold $19,000 in new stock and repurchased $79,000 in stock. The company purchased $1,778,000 in fixed assets and sold $514,000 in fixed assets.

Angus has asked you to prepare the financial statement of cash flows and the accounting statement of cash flows. He also has asked you to answer the following questions:

1. How would you describe Warf Computers’s cash flows?

2. Which cash flow statement more accurately describes the cash flows at the company?

3. In light of your previous answers, comment on Nick’s expansion plans.

Place your order now for a similar assignment and have exceptional work written by one of our experts, guaranteeing you an A result.

Need an Essay Written?

This sample is available to anyone. If you want a unique paper order it from one of our professional writers.

Get help with your academic paper right away

Quality & Timely Delivery

Free Editing & Plagiarism Check

Security, Privacy & Confidentiality