Please see attached file for proper format.;John Marshall is employed as a bank loan officer for CityBank. He is comparing two companies that have applied for loans and he wants your help in evaluating those companies.;The two companies - Morris Company and Walker Company - are approximately the same size and had approximately the same cash balance at the beginning of 2009.;Because the total cash flows for the three-year period are virtually the same, John is inclined to evaluate the two companies as equal in terms of their desirability as loan candidates.;Abbreviated information (in thousands of dollars) from Morris Company and Walker Company is shown below;Morris Company Walker Company;Cash flows from: 2009 2010 2011 2009 2010 2011;Operating activities: $10 13 15 8 3 -2;Investing activities: $(5.00) $(8.00) $(10.00) $(7.00) $(5.00) $8.00;Financing activities: $8.00 $(3.00) $1.00 $12.00 $4.00 $-;Net from all activities: $13 $2.00 $6.00 $13.00 $2.00 $6.00;Instructions;1. Do you agree with John's preliminary assessment that the two companies are approximately equal in terms of their strength as loan candidates? Why or why not?;2. What might account for the fact that Walker Company's cash flow from financing activities is zero in 2011?;3. Generally, what would you advise John with regard to using statements of cash flows in evaluating loan candidates?;Attachments;Book1.xlsx
Evaluate: applied for loans: Morris Co. and Walker Co.
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