Financial Decision Making pros and cons
Discussions
To participate in the following discussions, go to this week’s Discussion link in the left navigation. The instructor likes references to be in the discussions as well as 200 words each
- The Statement of Cash Flows
Describe the following terms as they relate to the statement of cash flows: cash, operating activities, investing activities, financing activities. What can creditors, investors, and other users glean from an analysis of the statement of cash flows? Respond to at least two of your fellow students’ postings. - Analyzing the Statement of Cash Flows
Using the table below, explain the difference between net income and cash flow from operating activities for Techno in 2009 and analyze Techno’s cash flows for 2008 and 2009.
|
(in thousands) |
2009 |
2008 |
|
Net income |
$ 316,354 |
$ 242,329 |
|
Noncash charges (credits) to income |
||
|
Depreciation and amortization |
68,156 |
62,591 |
|
Deferred taxes |
15,394 |
22,814 |
|
$ 399,904 |
$ 327,734 |
|
|
Cash Provided (Used) by Operating Assets and Liabilities: |
||
|
Receivables |
(288,174) |
(49,704) |
|
Inventories |
(159,419) |
(145,554) |
|
Other current assets |
(1,470) |
3,832 |
|
Accounts payable, accrued liabilities |
73,684 |
41,079 |
|
Total Cash Provided by Operations |
$ 24,525 |
$ 177,387 |
|
Investment activities |
||
|
Additions to plant and equipment |
(94,1760) |
(93,136) |
|
Other investment activities |
14,408 |
(34,771) |
|
Net investment activities |
($ 79,768) |
($ 127,907) |
|
Financing activities |
||
|
Purchases of treasury stock |
(45,854) |
(39,267) |
|
Dividends paid |
(49,290) |
(22,523) |
|
Net changes in short-term borrowing |
125,248 |
45,067 |
|
Additions to long-term borrowings |
135,249 |
4,610 |
|
Repayments of long-term borrowings |
(250,564) |
|
|
Net financing activities |
$ 165,353 |
($ 262,677) |
|
Increase (decrease) in cash |
$ 110,110 |
($ 213,197) |
|
Beginning cash balance |
78,114 |
291,311 |
|
Ending cash balance |
$ 188,224 |
$ 78,114 |
Assignment
To complete the following assignment, go to this week’s Assignment link in the left navigation.
Eastman Kodak 4
Each chapter in the textbook contains a continuation of this problem. The objective is to learn how to do a comprehensive financial statement analysis in steps as you learn the content of each chapter. Keep this in mind as you complete each week’s written assignment. Using the
Eastman Kodak 2007 Annual Report and
Form10-K, complete the following requirements:
- Open the financial statement analysis template that you saved from the Eastman Kodak 1 assignment and input the data from the Eastman Kodak cash flow statement. All cash flows from discontinued operations should be combined and input on the line labeled as such toward the bottom of the statement. In 2005, add the loss from the cumulative effect of the accounting change to the loss from continuing operations and input in the first line “Income (loss) from continuing operations”. When you have finished inputting the data, review the cash flow statement to make sure there are no red blocks indicating that your numbers do not match the cover sheet information you input from the Eastman Kodak 1 assignment. Make any necessary corrections before saving the “print outs” for both your input and the common-size cash flow statement that the template automatically creates for you. You will submit the “print outs” to your instructor.
- Analyze the cash flow statement of Eastman Kodak. Write a 3-page summary that includes important points that an analyst would use in assessing the ability of Eastman Kodak to generate cash flows and the appropriateness of the use of cash flows.
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