CASH FLOW ANALYSISThe statement of cash flows for Yahoo! are as follows: Yahoo! Inc. Explain the answers briefly.a. Yahoo!'s operations did not produce significant cash flows during Year 6 and Year 7. How does Yahoo! finance its growth in the absence of sufficient operating cash flows? What appears to drive the operating cash flows of Yahoo!b. Yahoo! Engages in purchases and sales of marketable securities. Why do you believe Yahoo! pursue this activity? Yahoo! reports $33.21 million of deferred revenue. Based on your understanding of Yahoo!'s operation, what do you believe this amount represents Cash flow from investing activitiesAcquisition of property and equipment(11,911)199(6,722)(3,442)cash acquired in acquisitionsPurchase of marketable securities(471,135)(115,247)43,240(58,753)Proceeds from sales and maturities of marketable158,35086,678securities(1,649)19,554(729)(76,178)Others investment(5,445)(329,942)Net cash provided by (used in) investing activitiesCash flow from financing activitiesProceeds from issuance of common stock, net280,6797,51642,48463,750Proceeds from issuance of convertible preferredstockProceeds from minority investors6009991,050Other1,106128281,279Net cash provided by financing activitiesEffect of exchange rate changes on cash andcash equivalentNet change in cash and cash equivalentscash and cash equivalents at beginning of yearcash and cash equivalents at end of year9,621107,156288(380)(63)61,90329,27528,52163,57134,2965,775125,47463,57134,296 The statement of cash flows for Yahoo! are as follows:Yahoo! Inc.Consolidated Statements of cash flowYear ended December 31,($ thousand)Year 8Year 7Year 6($)($)($)Cash flow from operating activitiesNet income(loss)25,588(25,520)6,472Adjustment to reconcile net income (loss) to netcashprovided by (used in) operating activitiesDepreciation and amortizationTax benefit from stock options10,21517,8272,737639Non-cash charges relatedand warrant issuancesstock option grants9261,676197(68)Minority interest in operation of consolidatedsubsidiaries(727)(540)Purchased in process research and developmentOther on cash charge17,30021,245Changes in assets and liabilitiesAccount receivables, net(13,616)5,9634,269Prepaid expensesAccount payable(6,110)2,425(386)1,3862,1445157,4042,983Accrued expenses and other current liabilities4,39316,68833,210deferred revenue1,665Due to related parties(451)330948Net cash provided by (used in) operating system110,278480(2,394)

Cash Flow Statement:Cash flow statement calculates the net cash flows by deducting cash outflows…

Answered: significant cash flows during Year 6…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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CASH FLOW ANALYSIS

The statement of cash flows for Yahoo! are as follows: Yahoo! Inc. Explain the answers briefly.

a. Yahoo!'s operations did not produce significant cash flows during Year 6 and Year 7. How does Yahoo! finance its growth in the absence of sufficient operating cash flows? What appears to drive the operating cash flows of Yahoo!

b. Yahoo! Engages in purchases and sales of marketable securities. Why do you believe Yahoo! pursue this activity? Yahoo! reports $33.21 million of deferred revenue. Based on your understanding of Yahoo!'s operation, what do you believe this amount represents

Cash flow from investing activities
Acquisition of property and equipment
(11,911)
199
(6,722)
(3,442)
cash acquired in acquisitions
Purchase of marketable securities
(471,135)
(115,247)
43,240
(58,753)
Proceeds from sales and maturities of marketable
158,350
86,678
securities
(1,649)
19,554
(729)
(76,178)
Others investment
(5,445)
(329,942)
Net cash provided by (used in) investing activities
Cash flow from financing activities
Proceeds from issuance of common stock, net
280,679
7,516
42,484
63,750
Proceeds from issuance of convertible preferred
stock
Proceeds from minority investors
600
999
1,050
Other
1,106
128
281,279
Net cash provided by financing activities
Effect of exchange rate changes on cash and
cash equivalent
Net change in cash and cash equivalents
cash and cash equivalents at beginning of year
cash and cash equivalents at end of year
9,621
107,156
288
(380)
(63)
61,903
29,275
28,521
63,571
34,296
5,775
125,474
63,571
34,296

The statement of cash flows for Yahoo! are as follows:
Yahoo! Inc.
Consolidated Statements of cash flow
Year ended December 31,
($ thousand)
Year 8
Year 7
Year 6
($)
($)
($)
Cash flow from operating activities
Net income(loss)
25,588
(25,520)
6,472
Adjustment to reconcile net income (loss) to net
cash
provided by (used in) operating activities
Depreciation and amortization
Tax benefit from stock options
10,215
17,827
2,737
639
Non-cash charges related
and warrant issuances
stock option grants
926
1,676
197
(68)
Minority interest in operation of consolidated
subsidiaries
(727)
(540)
Purchased in process research and development
Other on cash charge
17,300
21,245
Changes in assets and liabilities
Account receivables, net
(13,616)
5,963
4,269
Prepaid expenses
Account payable
(6,110)
2,425
(386)
1,386
2,144
515
7,404
2,983
Accrued expenses and other current liabilities
4,393
16,688
33,210
deferred revenue
1,665
Due to related parties
(451)
330
948
Net cash provided by (used in) operating system
110,278
480
(2,394)

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