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Memorandum-Statement of Cash Flows Essay

To:Stockholders of Carpino Company
CC:Ms. Lydia Money, Chief Executive Officer
From:W. E. Count, Financial Analyst
Re:Corporate Financial Position/Statement of Cash Flows

I have been charged to examine the Financial Statements of Carpino Company for the purpose of providing an objective opinion regarding organizational capacity to generate sufficient cash to continue as a going concern. Toward that end, I have examined financial statements and have prepared the attached Statement of Cash Flows for the Year Ended January 31, 2007. I am pleased to inform Carpino Company stockholders that your company has successfully begun the transition from the introductory phase to the growth phase of operations and your prospects for continued financial growth are excellent.

Carpino Company’s Statement of Cash Flows confirms that the organization enjoyed a high performing first year of operations with a net increase of cash of $105,000. Substantial investments were made in the purchase of productive assets during Year One totally an amount of $410,000. These assets will support and facilitate growth efforts going forward. Rest assured that expenditures for inventory will decrease significantly beginning with Year Two, with primarily repair and upgrade expenditures being incurred. Stock issues were made for the purchase of productive assets in the amount of $10,000. Carpino used $325,000 in investing activities in the hopes to create higher capital in the future. This financing debt has likewise peaked during Year One.

In spite of the cash outlays required to sufficiently introduce and sale your brand. Carpino experienced a net increase in cash of $105,000.00 at the end of Year One. Doing so speaks of outstanding management of company resources and is highly commendable. Carpino Company is now positioned for tremendous growth and the generation of increased cash flows.

As stockholders, you should be pleased with the foundation on which Carpino

Company has been built. The organization is poised for great success in the foreseeable future. By closely monitoring financial operations and analysis of the Statement of Cash Flows, you should expect to experience stable and profitable operations for many years to come.

Thank you.

W. E. Count, Financial Analyst

Carpino Company

Statement of Cash Flows
For the year ended January 31st, 2007

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