Cash Flow Analysis - while Dupont will rely largely on...

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Anthony Marsala Shenghao Bi ACC201 Sec. 24 Project #2 Cash Flow Analysis Based on the cash flow statements of these two companies, Dow Chemical receives a greater cash inflow from financing activities than Dupont, who is more operational based. As we can see from Dow’s statement, cash provided by financing activities in 2009 is about 12.7 billion dollars, compared with ($978 million) and ($2.7 billion) for 2008 and 2007 respectively. In comparison, Dupont’s 2009 cash inflow/outflow from financing activities was ($97 million), with 878 million in 2008 and ($3 billion) in 2007. As for operating activities, Dow Chemical earned about 2 billion dollars in 2009 and Dupont earned about 4.7 billion, more than twice as much as Dow. It is clear for these two competitive companies, the strategies are different. If the trend from the past three years continues, Dow will rely more and more on equity for investments
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Unformatted text preview: while Dupont will rely largely on operational income. As for investing activities, Dow s primary outflow of cash is investments in consolidated companies and capital expenditures amounting to 15 billion and 1.4 billion respectively. Dupont is slightly more conservative, with primary cash outflows of 1.3 billion for property, plant and equipment and 2 billion for short-term financial instruments. It is clear that Dow is relatively more aggressive in its investing activities than Dupont, which could prove to be highly rewarding but also poses a great deal of risk. Based on both companies trends from the past three years of increased cash outflow for investments, we can project that more and more funds in the future will be spent on corporate expansion....
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This note was uploaded on 10/04/2011 for the course ACC 201 taught by Professor Bokmier during the Fall '10 term at Michigan State University.

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