ALLGOMOTIVES (AGM) Inc.
Question #3:
Answer:
The three types of cash flows are as follows.
1. Operating activities
2. Investing Activities, and
3. Financing activities
The operating activities were consistent to the current stage and operations of company, although investing and financing activities in the statement of cash flow was little bit inconsistent from the current stage of the company because the investing activities included the purchase of patent rights and disposal of assets which are quite inconsistent with activities related to the company as before. On the other hand, the financing activities included the activity of issuance of shares that also differentiated from the normal business of company.
Question#4:
Answer:
AGM’s consideration of obtaining additional debt will change the capital structure of the company as it increases the burden of repayment of debt and this restructuring would also result in paying more interest rate every year, which will lead to lower profits. Although it is not necessary for the company at this time to again restructure the loan agreement terms because the earlier agreements look better than this agreement as the earlier loan agreement did not require paying principal amount until 2020........
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