Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN: 9781285190907
Author: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher: Cengage Learning
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Textbook Question
Chapter 3, Problem 17PC
Interpreting the Statement of Cash Flows. Tesla Motors manufactures high performance electric vehicles that are extremely slick looking. Exhibit 3.20 presents the statement of cash flows for Tesla Motors for 2010–2012.
REQUIRED
Discuss the relations among net income, cash flows from operations, cash flows from investing activities, and cash flows from financing activities for the firm over the three-year period.
Describe what stage of life cycle these relations suggest for Tesla Motors. Why are negative operating cash flows less than the net losses? Where is Tesla obtaining cash, and what are they doing with it? What do you think will happen with cash flows in 2013?
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Students have asked these similar questions
Review the statement of cash flows for Tesla Motors Inc. in ATC 14-1 on page 688. Discuss the cash position of the company by considering the following:
Does the company’s cash flow position appear to be improving?
Summit Manufacturing’s most recent statements of cash flows indicate that the firm has paid large dividends to its stockholders in each of the past three years. Upon noting this information,
A :
potential investors would be more likely to invest in Summit, but potential lenders may be less likely to grant the company a loan.
B :
potential investors would be less likely to invest in Summit, but potential lenders may be more likely to grant the company a loan.
C :
potential investors would be less likely to invest in Summit, and potential lenders may be less likely to grant the company a loan.
D :
potential investors would be more likely to invest in Summit, and potential lenders may be more likely to grant the company a loan.
Upon reviewing Myert Company's statement of cash flows, the following was noted:
Cash flows from operating activities $60,000
Cash flows from investing activities (125,000)
Cash flows from financing activities 115,000
From this information, the most likely explanation is that this company is
a
using cash from operations and borrowing to purchase long-term assets.
b
using cash from operations and selling long-term assets to pay back debt.
c
using its profits to expand growth.
d
using cash from investors to provide for operations.
Chapter 3 Solutions
Financial Reporting, Financial Statement Analysis and Valuation
Ch. 3 - Need for a Statement of Cash Flows. The accrual...Ch. 3 - Articulation of the Statement of Cash Flows with...Ch. 3 - Classification of Interest Expense. Under U.S....Ch. 3 - Prob. 4QECh. 3 - Classification of Changes in Short-Term Financing....Ch. 3 - Classification of Cash Flows Related to...Ch. 3 - Treatment of Non-Cash Exchanges. The acquisition...Ch. 3 - Computing Cash Collections from Customers....Ch. 3 - Computing Cash Payments to Suppliers. Lowes...Ch. 3 - Computing Cash Payments for Income Taxes. Visa...
Ch. 3 - Interpreting the Relation between Net Income and...Ch. 3 - Interpreting the Relation between Net Income and...Ch. 3 - Interpreting Relations among Cash Flows from...Ch. 3 - Interpreting Relations among Cash Flows from...Ch. 3 - Interpreting the Statement of Cash Flows. The...Ch. 3 - Interpreting the Statement of Cash Flows. Texas...Ch. 3 - Interpreting the Statement of Cash Flows. Tesla...Ch. 3 - Interpreting the Statement of Cash Flows. Gap Inc....Ch. 3 - Prob. 19PCCh. 3 - Prob. 20PCCh. 3 - Interpreting the Statement of Cash Flows....Ch. 3 - Extracting Performance Trends from the Statement...Ch. 3 - Interpreting a Direct Method Statement of Cash...Ch. 3 - Prob. 24PCCh. 3 - Preparing a Statement of Cash Flows from Balance...Ch. 3 - Prob. 26PCCh. 3 - Preparing a Statement of Cash Flows from Balance...Ch. 3 - Prob. 1AICCh. 3 - Prob. 1BICCh. 3 - Prob. 1CICCh. 3 - Prob. 1DICCh. 3 - Prob. 1EICCh. 3 - Prob. 1FICCh. 3 - Prob. 1GICCh. 3 - Prob. 1HICCh. 3 - Prob. 2AICCh. 3 - Prob. 2BICCh. 3 - Prob. 2CICCh. 3 - Prob. 2DICCh. 3 - Prob. 2EICCh. 3 - Prob. 2FICCh. 3 - Prob. 3IC
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