Below are the summarised Statements Cash Flow for two other sole traders. Comment on which one has a healthier cash flow situation and justify your answer by explaining the significance of each of the three types of cash flows for each business:
Bill's Ben's
Cash flow from Operating Activities 12 000 6 000
Cash flow from Investing Activities (18 000) 8 000
Cash flow from Financing Activities 4 000 (12 000)
Net increase / (decrease) in cash held (2 000) 2 000
Cash at the beginning of the year 5 000 5 000
Cash at the end of the year 3 000 7 000