Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN: 9781285190907
Author: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher: Cengage Learning
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Chapter 3, Problem 19PC
To determine
Explain the relation between net loss and cash flow from operations, investing, and financing activities.
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1. Comment on why you think that the set of general-purpose financial statements comprises an income statement, statement of changes in equity, balance sheet and a statement of cash flows.\
2. In September 2016, JB Hi Fi purchased The Good Guys, a competing business, for $870m. Analyse the statements of cash flows above and explain any changes from 2016 to 2017 that you think may be attributable to this acquisition.
The consolidated balance sheets for Lloyd Lumber Company at the beginning and end of 2015 follow. The company bought $50 million worth of fixed assets. The charge for depreciation in 2015 was $10 million. Net income was $33 mil- lion, and the company paid out $5 million in dividends
a. Fill in the amount of the source or use in the appropriate column.
b. Prepare a statement of cash flows.
c.Briefly summarize your findings.
Review the statement of cash flows for Tesla Motors Inc. in ATC 14-1 on page 688. Discuss the cash position of the company by considering the following:
How is Tesla repaying its debt?
Chapter 3 Solutions
Financial Reporting, Financial Statement Analysis and Valuation
Ch. 3 - Need for a Statement of Cash Flows. The accrual...Ch. 3 - Articulation of the Statement of Cash Flows with...Ch. 3 - Classification of Interest Expense. Under U.S....Ch. 3 - Prob. 4QECh. 3 - Classification of Changes in Short-Term Financing....Ch. 3 - Classification of Cash Flows Related to...Ch. 3 - Treatment of Non-Cash Exchanges. The acquisition...Ch. 3 - Computing Cash Collections from Customers....Ch. 3 - Computing Cash Payments to Suppliers. Lowes...Ch. 3 - Computing Cash Payments for Income Taxes. Visa...
Ch. 3 - Interpreting the Relation between Net Income and...Ch. 3 - Interpreting the Relation between Net Income and...Ch. 3 - Interpreting Relations among Cash Flows from...Ch. 3 - Interpreting Relations among Cash Flows from...Ch. 3 - Interpreting the Statement of Cash Flows. The...Ch. 3 - Interpreting the Statement of Cash Flows. Texas...Ch. 3 - Interpreting the Statement of Cash Flows. Tesla...Ch. 3 - Interpreting the Statement of Cash Flows. Gap Inc....Ch. 3 - Prob. 19PCCh. 3 - Prob. 20PCCh. 3 - Interpreting the Statement of Cash Flows....Ch. 3 - Extracting Performance Trends from the Statement...Ch. 3 - Interpreting a Direct Method Statement of Cash...Ch. 3 - Prob. 24PCCh. 3 - Preparing a Statement of Cash Flows from Balance...Ch. 3 - Prob. 26PCCh. 3 - Preparing a Statement of Cash Flows from Balance...Ch. 3 - Prob. 1AICCh. 3 - Prob. 1BICCh. 3 - Prob. 1CICCh. 3 - Prob. 1DICCh. 3 - Prob. 1EICCh. 3 - Prob. 1FICCh. 3 - Prob. 1GICCh. 3 - Prob. 1HICCh. 3 - Prob. 2AICCh. 3 - Prob. 2BICCh. 3 - Prob. 2CICCh. 3 - Prob. 2DICCh. 3 - Prob. 2EICCh. 3 - Prob. 2FICCh. 3 - Prob. 3IC
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- Using the four-year financial statements of Tesla 2017-2020 (Appendix 2), evaluate and explain the profitability, solvency, liquidity, activity and market dimensions of Tesla’s financial performance highlighting the main weaknesses and strengths of Tesla ( ratios and explaning )arrow_forward1. Which of the following represents an Investing cash outflow? Select one: a.An increase in holdings of stocks of other companies b.A decrease in Accounts payable c.A decrease in Accumulated depreciation d.A decrease in gross property, plant and equipment 2.Starbuck Inc. reported EPS of $2.30 for 2013. In 2013 Starbuck had earnings available to common stockholders of $1,380,000. How many outstanding shares of common stock did Starbuck have in 2013? Select one: a. 400,000 b.600,000 c.3,600,000 d.3,174,000 3. Which of the following statements are false? Select all that apply. Select one or more: a. Return on total assets (ROA) is sometimes called return on investment b. Liquidity ratios are used to measure the speed with which various accounts are converted into sales. c. A P/E ratio of 20 indicates that investors are willing to pay $20 for each $1 of earnings. d. When ratios of different years are being compared, inflation should be taken into consideration e. Generally,…arrow_forwardNEED Answer please General Accountingarrow_forward
- I have to use the balance sheets below to Provide four ratio calculations (i.e., one ratio each for liquidity, solvency, profitability, and market) as well as an analysis Can you help with the calculationsarrow_forwardREQUIRED Study the statement of cash flows of Mantis Limited for the year ended 31 December 2021 and answer the following questions: Calculate the following for the year ended 31 December 2021: Depreciation Dividends paid Of what significance is this statement of cash flows to the shareholders of Mantis Limited? Comment on the following: Cash flows from operating activities (R181 800) 1.3.2. Increase in inventory (R808 000) Increase in receivables (R606 000) Interest paid (R80 800) Cash flows from investing activities (R2 343 200) INFORMATION MANTIS LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2021 R Cash flows from operating activities (181 800) Operating profit 979 700 Depreciation ? Profit before working capital changes ? Working capital changes (808 000) Increase in inventory (808 000) Increase in receivables…arrow_forwardUsing the four-year financial statements of Tesla 2017-2020 , evaluate and explain the profitability, solvency, liquidity, activity and market dimensions of Tesla’s financial performance highlighting the main weaknesses and strengths of Tesla.arrow_forward
- 7-10- The consolidated balance sheets for Lloyd Lumber Company at the beginningand end of 2015 follow. The company bought $50 million worth of fixed assets.The charge for depreciation in 2015 was $10 million. Net income was $33 mil-lion, and the company paid out $5 million in dividends .a.Fill in the amount of the source or use in the appropriate column. b.Prepare a statement of cash flows.c.Briefly summarize your findings. c. Summarize your findings (Image attached)arrow_forwardUsing the four-year financial statements of Tesla 2017-2020 (Appendix 2), evaluate and explain the profitability, solvency, liquidity, activity and market dimensions of Tesla’s financial performance highlighting the main weaknesses and strengths of Tesla. Consolidated Statements of Cash Flows(in millions of $) Items 2017 2018 2019 2020 Cash Flows from Operating Activities Net income (loss) (2,241) (1,063) (775) 862 Adjustments to reconcile net income (loss) to net cash provided byoperating activities: Depreciation, amortization and impairment 1,636 1,901 2,154 2,322 Stock-based compensation 467 749 898 1,734 Amortization of debt discounts and issuance costs 91 159 188 180 Inventory and purchase commitments write-downs 132 85 193 202 Loss on disposals of fixed assets 106 162 146 117 Foreign currency transaction net loss (gain) 52 (2) (48) 114 Loss (gain) related to SolarCity acquisition 58 --- --- --- Non-cash interest…arrow_forwardIn preparation for developing its statement of cash flows for the year ended December 31, 2016, Rapid Pac, Inc., collected the following information: ($ in millions) Fair value of shares issued in a stock dividend $ 65 Payment for the early extinguishment of long-term bonds (book value: $97 million) 102 Proceeds from the sale of treasury stock (cost: $17 million) 22 Gain on sale of land 4 Proceeds from sale of land 12 Purchase of Microsoft common stock 160 Declaration of cash dividends 44 Distribution of cash dividends declared in 2015 40 Required: 1. In Rapid Pac’s statement of cash flows, what were net cash inflows (or outflows) from investing activities for 2016? 2. In Rapid Pac’s statement of cash flows, what were net cash inflows (or outflows) from financing activities for 2016?arrow_forward
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