The three most important points in the Group (Consolidated) Cash Flow Statement are as follows:
1. Cash generated from operations has increased from €929m in 2012 to €1,018m in 2013. This represents a 9.58% increase. This indicates that there has been a significant improvement in the cash-generating ability of SKG’s core activities. This is probably as a result of the large number of businesses acquired in 2012. This information would be of important value to investors as it give them a good insight into SKG’s cash-generating process.
2. Net cash outflow from investing activities has decreased from €480m in 2012 to €366m in 2013. This represents a 23.75% decrease. SKG put substantial investment into subsidiaries in 2012 (€179m). However,
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Firstly, it has shown significant growth year-on-year reflected in the 9% growth in EBITDA. It is a large, international company that is continuingly seeking to expand its operations, both in Europe and in the Americas. . It has acquired several acquisitions and has a continuing strong performance in South America. Its recent achievement of a corporate credit profile demonstrates its ability to pay its debt, reflecting a lower risk to investors. The large dividend that is paid to shareholders would also be evidence of a good investment, and the increase in dividend payout ratio demonstrates SKG’s strong dividend policy. Investors would be interested in SKG’s P/E ratio which calculates the company’s value on the stock market relative to its earnings. SKG’s P/E ratio increased from 6.47 in 2012 to 13.8 in 2013. The fact that the P/E ratio more than doubled in a year would show investors that the business is performing extremely well. Lastly, SKG refinanced its €1.375 billion Senior Credit Facility at significantly reduced rates, which is extremely important for investors as a less leveraged company is less likely to come under pressure from a …show more content…
Firstly, the company’s ability to maintain a strong cash flow in difficult economic times is impressive and also enabled a debt paydown of €171 million. SKG’s current ratio has stayed relatively consistent over the years at around 1.5, again reflecting the financial health of the company and its ability to meet its obligations. SKG also has no liquidity problems as reflected in the quick ratio. SKG’s times interest cover ratio of 2.99 in 2013 shows that the company is very capable of managing its interest expenses. The strong earnings growth in the Americas shows that there are huge growth opportunities for SKG. The company’s strategy for takeover and expansion has resulted in a growing business with improving liquidity and a bright
DQ 2: Why, and to whom, is the statement of cash flow useful? What is the most important section of the statement of cash flows for investors? Why?
operating profit reached $396.7 million in FY2012, an increase of 47.6% over FY2011. Also, the net
The firm shows positive health for the Shareholders Equity with an equity ratio of 44.2% in 2011 and increasing to 45.2% in 2012. Calculating the percent of total assets that shareholders would receive in the event of company liquidation looks positive and very healthy for any investors or shareholders of this firm. The interest coverage ratio is also at a value that is significantly positive 14.0% in 2011 and 12.8% in 2012. Although 2021 shows a decrease, the company is still very capable of generating sufficient revenues to cover their interest payments on any debt they have incurred.
The technology portion of their company has grown tremendously which has caused so much of their growth. In addition, they found the perfect formula to appeal to and retain customers. Most of their customers are loyal to their company and insist on sticking to their products. Their market capitalization, $639,922 million, is extremely high compared to other companies in their industry They returned about $8 billion to shareholders during their quarter. Also, their gross margins, currently at 38.01%, are high at passed by
After reviewing the financial and performance information related to Keurig Green Mountain and its operations, I would recommend holding the Keurig Green Mountain stock. Keurig has a high degree of leverage and has the ability to take on more debt to finance its expansion of operations. As Keurig Green Mountain navigates managing strong sales in current markets and expanding into untapped markets, it will also have to manage criticism about sustainability and face legal consequences stemming from product recalls. Balancing the strong growth potential with challenging strategic issues will help determine Keurig’s unpredictable stock price.
The cash flow statement consists of three parts: cash flows provided by operating activities of $13,831, cash flows provided by investing activities, and cash flows provided by financing activities effect of exchange rate changes on cash and cash equivalents of ($204)
So while the company increased its net income, it has done so with diminishing profit margins.
Stryker has a Quick ratio of 3.08, which shows it has the ability to meet any short-term cash needs. Stockholders Equity has increased by 8.18% from Q2FY12 to Q2FY13. This tells me that it is very unlikely that they will face any financial difficulty in the near future. It also indicates they have the cash flow to continue growing through acquisitions.
During this period, the Return on Assets increased from 5.7% in 2012 to 34.6% in 2013. This implies the number of cents earned on each dollar of assets increased from 2012 to 2013. This shows that the business has become more profitable. Equally, the Return on Equity also increased from 12.0% in 2012 to 46.5% in 2013. This similarly implies that the company in 2013 was more efficient in generating income from new investment. This, also can be attributed to the sale of the Digital Business Brand which enabled the company appraise its strategic plan.
There is no significant increase or deduction in terms of financial performance. There is a slightly downturn showing in the franchising sales revenue from 5.19bn to 5.08bn contributed by almost the same amount of outlets. Basic earnings per share have increased from 21.78c to 23.75c whilst a decrease of 2c in dividend per share compared with 2010.
Cash on hand is $398 million. This is only a $110 million increase from December 31, 1999. This means relatively little, as the cash flows for the corporation is what really matters.
The Statement of Cash flows is a very useful financial statement that can benefit investors, managers and even auditors. The statement of cash flows has not been around as long as the other financial statements such as the balance sheet or income statement. It basically “illustrates the way accounting evolves to meet the requirements of users of financial statements.” (Marshall, 2003) The statement of cash flows is designed to provide important information about the cash that a company has received or has paid out during a certain time period. It provides a reason for the changes of cash received and paid by a company by taking into
It’s noticeable how the company’s operations have been deteriorating as they are having a more difficult time translating sales into cash. Their A/R turnover is not where it needs to be, and in line with that, their liabilities are increasing as well. The company has also been inefficient with the use of their assets as their current activity ratios are not up to par with the industry standards.
| Below is an excerpt from the cash flow statement of a firm for fiscal year 2003: Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Amortization of software Tax benefits of employee stock plans Special charges (Gains)/losses on investments Change in operating assets and liabilities: Receivables Inventories Pension assets Other assets Accounts payable Pension liabilities Other liabilities Net cash provided by operating activities Cash flows from investing activities: Payments for plant and other property Proceeds from disposition of plant and other property Investment in software