SKG Cash Flow Statement

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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
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