Cash Flow statementNet Profit QUESTION : WHY IS THE NET PROFIT (.90)(0.90)Add :Depreciation Expenses0.400.40Increase in Account Receivable(0.10)Increase in Inventory(0.30)Increase in Account Payable0.500.10Net Cash Flow from Operating Activities(0.40)Purchase of New Factory(3.00)Net Cash from Investing Activities(3.00)Issue of Common StockCommon Stock0.10Paid in Capital in excess of Par Value1.001.10Issue of Bonds1.60Net Cash flow from Investing Activities2.7Net Increase in cash and Cash Equivalents(0.70)Beginning Cash Balance1.90Ending Cash Balance1.20Comparable balance sheets are presented below:Dec. 31, 2015 Dec. 31, 2014AssetsCash 1.2 1.9Accounts Receivable 0.4 0.3Inventory 1.3 1.0Property, Plant & Equipmen 6.0 3.0Less: Accumulated Depreciation (0.8) (0.4)8.1 5.8Liabilities & Stockholder's EquityAccounts Payable 2.6 2.1Dividends Payable - -Bonds Payable 4.4 2.8Common Stock, $1 Par Value 0.2 0.1Paid-in Capital in Excess of Par Value 3.2 2.2Retained Earnings (2.3) (1.4)8.1 5.8