(in thousands) 2009 2008 Net income $ 316,354 $ 242,329 Noncash charges (credits
ID: 2749287 • Letter: #
Question
(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
(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
Explanation / Answer
A cash flow statement measures the sources of company's cash and describes as to how the company uses this cash or deploys it over a specific period of time.
Income statement is a statement of financial performace that measures the performance of the company in terms of the revenues generated, the operating costs, the administrative costs, the interest, expenses and profits or losses over a period of time.
Income Statement: From the net income statmenent we can see that the net income of the company in 2009 was about 22% higher than the income in 2008. This indiccates that the company performed better in 2009.
Ananlysis of Cash flow statement
a. The Accout receivables indicates a huge change of more than 100% from 2008 to 2009 which indicates that the company sold a majority of its goods on a credit basis and hence the large account receivables
b.Becasue of this incerased credit sales, the current assets of the compan is also reduced from 2008
c. The payables of the company also has incerased which can be attributed to the slower cash conversion cycle due to larger receivables.
d.We can also see that the company has paid a one time long term borrowing in 2008 which has had an affect in its cash flow from financing activities. On the other hand the firm added long term borrowings in the year 2009
e.The company also recieved additonal cash of $14,408 from other investing activities in the year 2009 which indicates favourable investments of the company.
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