Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 13, Problem 13.4ADM
Priceline:
Priceline Group, Inc. is a leading provider of online travel reservation services, including brand names Priceline, KAYAK, and OpenTable. Selected cash flow information from the statement of
| Year 3 | Year 2 | Year 1 | |
| Net cash provided by operating activities | $ 2,914 | $ 2,301 | $ 1,786 |
| Net cash used in investing activities | (2,349) | (2,162) | (1,563) |
| Net cash provided by (used in) financing activities | 1,429 | (404) | 669 |
| Additions to property, plant, and equipment | (132) | (84) | (55) |
| Repurchase common stock | (750) | (884) | (257) |
| Acquisitions and investments | (2,146) | (1,997) | (1,587) |
- A. Determine the net change in cash for each year.
- B. Determine the free cash flow for each year.
- C. How is the free cash flow being used based on the data provided?
- D. Which is better for measuring the cash flow available for investment, dividends, debt repayments, and stock repurchases: the change in cash for the period or the free cash flow? Explain.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Analyze Priceline
The Priceline Group Inc. (PCLN) is a leading provider of online travel reservation services, including brand names Priceline, KAYAK, and OpenTable. Selected cash flow information from the statement of cash flows for three recent years is as follows (in millions):
Year 3
Year 2
Year 1
Net cash provided by operating activities
$ 3,925
$ 3,102
$ 2,914
Net cash used for investing activities
(3,333)
(3,895)
(2,358)
Net cash provided by (used for) financing activities
58
(730)
1,429
Additions to property, plant, and equipment
(220)
(174)
(132)
Repurchase common stock
(1,014)
(3,089)
(750)
Acquisitions and investments
(8)
(140)
(2,496)
a. Determine the net change in cash for each year. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Year 3:
Year 2:
Year 1:
b. Determine the free cash flow for each year.
Year 3:
Year 2:
Year 1:
c. How is the free cash flow being used based on the data provided?
d. Which is…
ccClassify each cash transaction between Operating (O), Investing (I), or Financing (F) activities using the following data:
__Cash at the beginning of the year: $650,000
Cash Receipts from:
__Bank (Interest on CD) $6,000
__Customers Sales $872,000
__Interest $33,000
__Dividends $3,600
Cash payments for:
__Dividends $2,500
__Raw Materials $ 3,800
__Wages Expense $4,000
__Land $10,000
__Interest $4,000
Free Cash Flow Kat Co. reports the following financial data for the current year:
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Cash disbursed for capital expenditures
Compute Kat's free cash flow.
Free cash flow S 17175 x
Check
$21,500
(10,555)
4,250
(4,325)
Chapter 13 Solutions
Corporate Financial Accounting
Ch. 13 - What is the principal disadvantage of the direct...Ch. 13 - What are the major advantages of the indirect...Ch. 13 - A corporation issued 2,000,000 of common stock in...Ch. 13 - A retail business, using the accrual method of...Ch. 13 - If salaries payable was 100,000 at the beginning...Ch. 13 - Prob. 6DQCh. 13 - A corporation issued 2,000,000 of 20-year bonds...Ch. 13 - Fully depreciated equipment costing 50,000 was...Ch. 13 - Prob. 9DQCh. 13 - Name five common major classes of operating cash...
Ch. 13 - Classifying cash flows Identify whether each of...Ch. 13 - Adjustments to net incomeindirect method Ripley...Ch. 13 - Prob. 13.3BECh. 13 - Prob. 13.4BECh. 13 - Prob. 13.5BECh. 13 - Common stock transactions on the statement of cash...Ch. 13 - Appendix 2 Cash received from customersdirect...Ch. 13 - Reporting changes in equipment on statement of...Ch. 13 - Prob. 13.1EXCh. 13 - Effect of transactions on cash flows State the...Ch. 13 - Classifying cash flows Identify the type of cash...Ch. 13 - Prob. 13.4EXCh. 13 - Cash flows from operating activities indirect...Ch. 13 - Prob. 13.6EXCh. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Prob. 13.8EXCh. 13 - Prob. 13.9EXCh. 13 - Prob. 13.10EXCh. 13 - Determining cash payments to stockholders The...Ch. 13 - Prob. 13.12EXCh. 13 - Reporting land acquisition for cash and mortgage...Ch. 13 - Reporting issuance and retirement of long-term...Ch. 13 - Prob. 13.15EXCh. 13 - Prob. 13.16EXCh. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsindirect method List the...Ch. 13 - Prob. 13.19EXCh. 13 - Prob. 13.20EXCh. 13 - Prob. 13.21EXCh. 13 - Prob. 13.22EXCh. 13 - Statement of cash flowsindirect method The...Ch. 13 - Prob. 13.2APRCh. 13 - Prob. 13.3APRCh. 13 - Prob. 13.4APRCh. 13 - Statement of cash flows direct method applied to...Ch. 13 - Prob. 13.1BPRCh. 13 - Prob. 13.2BPRCh. 13 - Prob. 13.3BPRCh. 13 - Prob. 13.4BPRCh. 13 - Statement of cash flowsdirect method applied to PR...Ch. 13 - Prob. 13.1ADMCh. 13 - Prob. 13.2ADMCh. 13 - Prob. 13.3ADMCh. 13 - Priceline: Free cash flow Priceline Group, Inc. is...Ch. 13 - Ethics in Action Head Donuts Inc. is a retailer of...Ch. 13 - Prob. 13.3TIF
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Ratio of cash to monthly cash expenses Pacira Pharmaceuticals Inc. (PCRX) Develops, produces, and sells products used in hospitals and surgery centers. The following data (in thousands) were adapted from recent financial statements. Including short-term investments as part of cash and cash equivalents, compute the ratio of cash to monthly cash expenses for Years 1 and 2. Round to one decimal place.arrow_forwardPlease help me with show all calculation thankuarrow_forwardneed best help with workingarrow_forward
- Cash Flow RatiosSpencer Company reports the following amounts in its annual financial statements: Cash flow from operating activities $90,000 Capital expenditures $59,500* Cash flow from investing activities (68,000) Average current assets 136,000 Cash flow from financing activities (8,500) Average current liabilities 102,000 Net income 42,500 Total assets 255,000 * This amount is a cash outflowa. Compute Spencer's free cash flow.b. Compute Spencer's operating-cash-flow-to-current-liabilities ratio.c. Compute Spencer's operating-cash-flow-to-capital-expenditures ratio. Round ratios to two decimal points. a. Free cash flow Answer b. Operating-cash-flow-to-current-liabilities ratio Answer c. Operating-cash-flow-to-current-expenditures ratio Answerarrow_forwardComputing the cash ratio Smythe Banners reported the Following figures in its financial statements: Compute the cash ratio for Smythe Banners.arrow_forwardes Aim Limited has the following selected data ($ in millions): Cash balance, January 1 Financing cash flows Capital expenditures Investing cash flows Operating cash flows $ 180 1,090 (400) (500) (440) Required: 1. Calculate the balance of cash at the end of the fiscal year, December 31. 2. Calculate free cash flows. 3. Based on the pattern in cash flows, determine Aim's life cycle stage. Note: Amounts to be deducted should be indicated by a minus sign. 1. Cash balance, December 31 2. Free cash flows 3. Aim's probable life cycle stagearrow_forward
- Need answerarrow_forwardRatio of Cash to Monthly Cash Expenses Financial data for Bonita Company follows: For Year EndedDecember 31 Cash on December 31 $187,180 Cash flow from operations (458,400) a. Compute the ratio of cash to monthly cash expenses. Round your answer to one decimal place.fill in the blank 1 months b. Interpret the results computed in (a).arrow_forwardFree cash flow Dillin Inc. reported the following on the company's statement of cash flows in 20Y2 and 20Y1: 20Y2 20Y1 Net cash flow from operating activities $476,200 $456,200 Net cash flow used for investing activities (429,000) (379,000) Net cash flow used for financing activities (41,000) (57,000) Eighty percent of the net cash flow used for investing activities was used for the purchase of property, plant, and equipment. a. Determine Dillin's free cash flow for both years. 20Y2 20Y1 Free cash flow $ b. Has Dillin's free cash flow improved or declined from 20Y1 to 20Y2?arrow_forward
- Please help mearrow_forwardRequirements: Prepare the Statement of Cash Flows in Direct and Indirect Methodarrow_forwardThe following data is given for DGR Company: Net cash flows from operating activities $6,000,000 Cash and cash equivalents at end of year $2,700,000 DGR Company's ratio of cash to monthly cash expenses is ____. a.3.2 months b.4.5 months c.5.4 months d.8.1 monthsarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License