GibsonSM_10 - Chapter 10 Statement of Cash Flows TO THE NET...

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Unformatted text preview: Chapter 10 Statement of Cash Flows TO THE NET 1. a. 3812 Search, Detection, Navigation, Guidance, Aeronautical Systems b. Northrop Grumman Corporation (Northrop Grumman or the company) provides technologically advanced, innovative products, services, and solutions in defense and commercial electronics, nuclear and nonnuclear shipbuilding, information technology, mission systems, systems integration, and space technology. c. Direct Method. It provides a clear picture of cash inflow and outflow from operations. d. Noncash Investing and Financing Activities Conversion of debt to equity Settlement of note receivable in lieu of payment Sale of business Note receivable, net of discount Investment in unconsolidated affiliate Purchase of business Fair value of assets acquired Cash paid, net of cash acquired Noncash stock compensation Common stock issued Liabilities assumed All of these noncash transactions involving investing and financing activities are important to understanding investing and financing activities but they are not part of cash flow. The conversion of debt to equity is an important financing activity that did not involve cash flow. 2. a. 3571 Electronic Computers b. Dell Inc., with fiscal 2005 net revenue of $49.2 billion, is a premier provider of products and services worldwide that enable customers to build their information-technology and Internet infrastructures. c. January 28, 2005 January 30, 2004 (In millions) Accounts receivable, net $4,414 $3,635 Inventories 459 327 Accounts payable 8,895 7,316 d. 15 January 28, 2005 January 30, 2004 (Percentage) Accounts receivable, net 121.8 100.0 Inventories 140.4 100.0 Accounts payable 121.6 100.0 e. January 28, 2005 January 30, 2004 January 31, 2003 (In millions) Net revenue 49,205 41,444 35,404 Net income 3,043 2,645 2,122 Net cash provided by operating activities 5,310 3,670 3,539 f. January 28, 2005 January 30, 2004 January 31, 2003 (Percentage) Net revenue 139.0 117.1 100.0 Net income 143.4 124.6 100.0 Net cash provided by operating activities 150.1 103.7 100.0 g. (c) and (d) indicate that Inventories went up more than Accounts Receivable, Net and Accounts Payable. This could indicate that inventories are getting ahead of sales. Net Income increased slightly faster than Net Revenue. This is a good indication. A review of net cash provided by operating activities would be needed to determine the reasons for the slight increase in 2004 and the material increase in 2005. 3. a. 2082 Malt Beverages b. On February 9, 2005, Adolph Coors Company merged with Molson Inc. (“Molson”). c. 1. Operating Cash Flow/Current Maturities of Long-Term Debt and Current Notes Payable 16 December 26, 2004 December 28, 2003 (In thousands) $499,908 $528,828 ($12,500 + $26,028) ($21,309 + $69,856) 13.0 times 5.8 times 2. Operating Cash Flow/Total Debt $499,908 $528,828 ($4,657,524 − $1,601,166) ($4,444,740 − $1,267,376) 16.4% 16.6% 3. Operating Cash Flow per Share $499,908 $528,828 ($1,260 + $36,392) ($1,260 + $35,154)...
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This note was uploaded on 12/20/2009 for the course COBA FIN302 taught by Professor Nejlaellili during the Spring '09 term at BA Mannheim.

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GibsonSM_10 - Chapter 10 Statement of Cash Flows TO THE NET...

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