SKG Cash Flow Statement

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