Financial Decision Making
Question 1 – 250 words
Referencing this week’s readings and lecture, describe the following terms as they relate to the statement of cash flows: cash, operating activities, investing activities, and financing activities. What can creditors, investors, and other users glean from an analysis of the statement of cash flows?
Question 2 – 250 words
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Order Paper NowUsing the table below, explain the difference between net income and cash flow from operating activities for Techno in 2009 and analyze their cash flows for 2008 and 2009.
| (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 |
PAPER 3
Cash Flow Statement – Ford Motor Company
In a two- to three-page paper (not including the title and reference pages), explain the purpose of a cash flow statement and how it reflects the firm’s financial status. Include important points that an analyst would use in assessing the financial condition of the company. Also, analyze Ford Motor Company’s cash flow from its 2012 Annual Report (Links to an external site.) https://corporate.ford.com/content/dam/corporate/en/investors/reports-and-filings/Annual%20Reports/2012-annual-report.pdf
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