Analyzing Statements of Cash Flows 4 8 Research Problem Choose five companies from different industries and locate their statements of cash flows for the most recent year a Create a table to compare the dollars provided or used by operating investing and financing activities as well as the overall increase or decrease in cash b Create a second table for each company comparing this same information for each of the three years presented in that company s statement of cash flows Include an additional column that looks at the combined cash flows for all three years c Write a short analysis of the information gathered Your discussion should address among other things whether cash flow from operating activities is large enough to cover investing and financing activities and if not how the company is financing its activities Discuss differences and similarities between the companies you have chosen a Create a table to compare the dollars provided or used by operating investing and financing activities as well as the overall increase or decrease in cash STATEMENT OF CASH FLOW ANALYSIS STARBUCK S 2008 HARELY DAVIDSON 2008 NET INCOME STARTING LINE 315 5 OPERATING ACTIVITIES 1 258 7 INVESTING ACTIVITES FINANCING ACTIVITIES CASH 1 086 6 184 5 11 5 684 7 393 3 1 293 4 190 7 RITE AID 2008 1 079 0 79 4 2 933 7 2 904 0 49 9 b Create a second table for each company comparing this same information for each of the three years presented in that company s statement of cash flows Include an additional column that looks at the combined cash flows for all three years STARBUCKS Net Income Starting Line Cash from Operating Activities Cash from Investing Activities 2008 2007 2006 315 5 1258 70 1086 60 672 64 1331 22 1201 95 564 26 1131 63 841 04 184 50 11 50 281 30 269 80 171 89 31 35 312 61 281 26 155 33 138 80 173 81 312 61 Cash from Financing Activities Net Change in Cash Net Cash Beginning Balance Net Cash Ending Balance HARLEY DAVIDSON Net Income Starting Line Cash from Operating Activities Cash from Investing Activities Cash from Financing Activities Net Change in Cash Net Cash Beginning Balance Net Cash Ending Balance RITE AID 2008 0 684 65 393 25 1293 39 190 70 402 85 593 56 2007 933 84 798 15 391 21 1037 80 164 46 238 40 402 85 2006 1043 15 761 78 35 26 637 02 97 42 140 98 238 4 Net Income Starting Line Cash from Operating Activities Cash from Investing Activities Cash from Financing Activities Net Change in Cash Net Cash Beginning Balance Net Cash Ending Balance 2008 2007 2006 1078 99 79 37 2933 74 2903 99 49 61 106 15 155 76 26 83 309 15 312 78 33 72 30 08 76 07 106 15 1273 01 417 17 231 08 272 84 86 75 162 82 76 07 c Write a short analysis of the information gathered Your discussion should address among other things whether cash flow from operating activities is large enough to cover investing and financing activities and if not how the company is financing its activities Discuss differences and similarities between the companies you have chosen Starbucks operating cash flow has gone up in 2007 and decreased a little in 2008 The net change in cash for Starbucks looks a on the down side but previously was doing well The net loss in cash at end of year is decreasing from the previous year This could mean that this year there can be a gain Harley Davidson s operating cash flow has significantly decreased from 2007 It appears the company was on an upward cycle from 2006 The decrease in cash from operating activities is probable from the lack of information supplied for net income With the economy the way it is and not many people buying at this point could have an effect on why the net income is decreasing With a bounced back economy in the coming year could reflect a positive gain Rite Aid s operating cash flow has taken a significant decrease as well from previous years Although after taking in cash from investing and cash from financing the net change in cash is better than it has been in previous years Rite Aid s net gain in cash could be from the ever growing needs in medical supplies This also could reflect the expansion of the company
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