The cash flow statements for retailing giant BigBox, Inc. spanning the period 20
ID: 2810242 • Letter: T
Question
The cash flow statements for retailing giant BigBox, Inc. spanning the period 2013–2016 are found here: . Answer the following questions using the information found in these statements:
a. Did BigBox generate positive cash flow from its operations?
b. How much did BigBox invest in new capital expenditures over the period?
c. Describe BigBox's sources of financing in the financial markets over the period.
d. Based solely on the cash flow statements for 2013 through 2016, write a brief narrative that describes the major activities of BigBox's management team over the period.
a. Did BigBox generate positive cash flow from its operations? (Select the best choice below.)
A. BigBox has generated positive cash flow from its operations during the years 2013, 2014, 2015, and 2016.
B. BigBox has generated positive cash flow from its operations during the years 2013, 2015, and 2016.
C. BigBox has generated positive cash flow from its operations during the years 2014, 2015, and 2016.
D. BigBox has generated positive cash flow from its operations during the years 2013, 2014, and 2016.
(US$ millions)
12/31/2016
12/31/2015
12/31/2014
12/31/2013
Net income
$13,010
$12,020
$11,100
$10,060
Depreciation expense
6,540
6,250
5,050
3,960
Changes in working capital
1,230
2,300
2,440
1,020
Cash from operating activities
$20,780
$20,570
$18,590
$15,040
Capital expenditures
$(15,990)
$(14,540)
$(13,980)
$(12,350)
Cash from investing activities
$(15,990)
$(14,540)
$(13,980)
$(12,350)
Interest and financing cash flow items
$(370)
$(290)
$(300)
$110
Total cash dividends paid
(3,610)
(2,770)
(2,450)
(2,150)
Issuance (retirement) of stock
(8,000)
(1,540)
(3,640)
(4,520)
Issuance (retirement) of debt
1,490
(140)
3,950
4,050
Cash from financing activities
$(10,490)
$(4,740)
$(2,440)
$(2,510)
Net change in cash
$(5,700)
$1,290
$2,170
$180
(US$ millions)
12/31/2016
12/31/2015
12/31/2014
12/31/2013
Net income
$13,010
$12,020
$11,100
$10,060
Depreciation expense
6,540
6,250
5,050
3,960
Changes in working capital
1,230
2,300
2,440
1,020
Cash from operating activities
$20,780
$20,570
$18,590
$15,040
Capital expenditures
$(15,990)
$(14,540)
$(13,980)
$(12,350)
Cash from investing activities
$(15,990)
$(14,540)
$(13,980)
$(12,350)
Interest and financing cash flow items
$(370)
$(290)
$(300)
$110
Total cash dividends paid
(3,610)
(2,770)
(2,450)
(2,150)
Issuance (retirement) of stock
(8,000)
(1,540)
(3,640)
(4,520)
Issuance (retirement) of debt
1,490
(140)
3,950
4,050
Cash from financing activities
$(10,490)
$(4,740)
$(2,440)
$(2,510)
Net change in cash
$(5,700)
$1,290
$2,170
$180
Explanation / Answer
a. BigBox has generated positive cash flow from its operations during the years 2013, 2014, 2015, and 2016. (Option A)
b. BigBox investment in new capital expenditures over the period
BigBox investment in new capital expenditures = 15990 + 14540 + 13980 + 12350
BigBox investment in new capital expenditures = $56860
c. BigBox's sources of financing in the financial markets over the period
Bigbox's over a period of time concentrating on getting funds from debt issue except in one year and got a debt of $9350 Millions over 4 years of and retiring a lot of common stock and retired an amount of $17700 Millions over 4 years'
d. Narration about Cash flow statement
Over 4 years period the company has generating increase net income over previous year and company is having higher depreciation which is accompanied by increase in capital expenditures and the company is trying to move towards debt issue and retirement of common stock a lot over the past 4 years
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