Business Finance - Accounting In this assignment, you will be creating a cash flow statement based on the Wicked Good Cupcakes income statement and balance sheet.

BUS523 Quantitative Analysis for Managers

Cash Flow Statement

Due Date: Sunday by 11:59 p.m. EST of Unit 5 Total Points: 100

Overview:

In this assignment, you will be creating a cash flow statement based on the Wicked Good Cupcakes income statement and balance sheet.

Instructions:

 Using the Income Statement and Balance Sheet provided in Unit 2, generate a Cash Flow Statement. You may have to make some assumptions in the process; list them in a comment column of your Cash Flow Statement.

 Summarize your findings and observations.

 What is your analysis of their current profit vs. cash situation?

 Are they in danger of running out of cash? What are your findings? Explain.

 What does their, as Warren Buffet, refers, ‘owning earnings’ (free cash flow) look like?

Requirements:

 Two to three-pages, excluding the Title and Reference pages.

 All questions posed must be addressed completely.

 APA format, including in-text citations for referenced works.

Be sure to read the criteria, by which your assignment will be evaluated, before you write, and again after you write.

Evaluation Rubric for Cash Flow Statement Assignment

CRITERIA Exemplary Proficient Deficient

(28 – 30 Points) (20 – 27 Points) (0 – 19 Points)

Cash Flow

Statement with All

Assumptions Made

Noted on the

Statement

The cash flow

statement is clearly

presented, including

all key details.

The cash flow

statement is

presented, though

key details may not

be clearly or

completely

presented.

Does not provide the

cash flow statement,

or the overview is

missing key details.

(18– 20 Points) (13 – 17 Points) (0 – 12 Points)

Current Profit vs.

Cash Analysis

The current profit vs.

cash is clearly

presented, including

analysis.

The current profit vs.

cash is presented,

though key details

may not be clearly or

completely presented.

Analysis is inadequate

or missing.

Running out of

Cash Analysis

Analysis of the danger

of running out of cash

is clearly presented.

Analysis of the

danger of running

out of cash is

presented, though

key details may not

be clearly or

completely presented.

Analysis is

inadequate or

missing.

Free Cash Flow

Analysis

Analysis is clearly

presented, including

all key details.

Analysis is

presented, though

key details may not

be clearly or

completely presented.

Analysis is

inadequate or

missing.

(9 – 10 Points) (7 – 8 Points) (0 – 6 Points)

Clear and

Professional

Writing and APA

Format

Writing and format are

clear, professional,

APA compliant, and

error-free.

Few errors that do

not impede

professional

presentation.

Errors impede

professional

presentation;

guidelines not followed.

Cash Flow Statement

		Cash Flow Statement 2016
		($ Thousands)
		Cash Flow from Operating Activities			Line(s) Used (e.g., 2015 Accounts Payable - 2016 Accounts Payable)
		Net income
		Change in Accounts Payable
		Change in Accounts Receivable
		Change in Inventory
		Other Adjustments:
		Accrued Expenses
		Depreciation Expense
		Income Taxes
		Net Cash provided by Operating Activities
		Cash Flow from Investing Activities			Line(s) Used
		Sale of Plant, Property and Equipment
		Purchase of Assets (Intangibles)
		Sales of other assets
		Income from short term investments (assumption from IS)
		Net Cash used in Investing Activities
		Cash Flows from Financing Activities			Line(s) Used
		Additions to long-term debts
		Cash dividends
		Repurchase of Treasury Stock
		Net cash used in Financing Activities
		Increase/Decrease in cash and cash equivalents
		Cash and Cash Equivalents at the beginning of the period
		Cash and Cash Equivalents at the end of the period
ERROR:#REF!	ERROR:#REF!

Balance Sheet

ANNUAL BALANCE SHEET
($ Thousands)
		31-Dec-15	31-Dec-16
ASSETS
Cash & Short-Term Investments		$17.11	$25.05
Net Receivables		$1.62	$1.84
Inventories		$42.72	$39.68
Prepaid Expenses		$0.00	$0.00
Other Current Assets		$3.38	$2.93
Total Current Assets		$64.84	$69.49
Gross Plant, Property & Equipment		$63.75	$58.28
Accumulated Depreciation		$36.16	$32.61
Net Plant, Property & Equipment		$27.58	$25.67
Intangibles		$5.88	$6.01
Other Assets		$6.16	$5.81
TOTAL ASSETS		$104.47	$106.98
LIABILITIES
Long Term Debt Due In One Year		$0.00	$0.00
Accounts Payable		$10.59	$11.91
Taxes Payable		$1.87	$2.01
Accrued Expenses		$7.19	$6.91
Other Current Liabilities		$1.88	$1.85
Total Current Liabilities		$21.54	$22.67
Long Term Debt		$6.95	$19.79
Deferred Taxes		$1.16	$2.32
Other Liabilities		$3.04	$2.43
TOTAL LIABILITIES		$32.68	$47.21
EQUITY
Common Stock		$0.07	$0.06
Capital Surplus		$27.25	$24.31
Retained Earnings		$73.89	$61.10
Less: Treasury Stock		$29.42	$25.71
TOTAL EQUITY		$71.79	$59.77
TOTAL LIABILITIES & EQUITY		$104.47	$106.98
Common Shares Outstanding		$5.14	$5.05

Income Statement

Annual Income Statement
($ Thousands, except per share )
		2015	2016
Sales		$179.24	$164.28
Cost of Goods Sold		$95.71	$91.99
Gross Profit		$83.53	$72.29
Selling, General, & Administrative Exp.		$56.36	$50.65
Operating Income Before Deprec.		$27.17	$21.64
Depreciation,Depletion,&Amortization		$5.85	$5.89
Operating Profit		$21.33	$15.74
Interest Expense		$0.88	$0.56
Non-Operating Income/Expense		$0.93	$0.31
Special Items		$0.00	$0.00
Pretax Income		$21.38	$15.49
Total Income Taxes		$7.23	$5.60
Income Before Extraordinary
Items & Discontinued Operations		$14.15	$9.90
Savings Due to Common Stock Equiv.		$0.00	$0.00
Adjusted Net Income		$14.15	$9.90
EPS Basic from Operations		$0.26	$0.19
EPS Diluted from Operations		$0.25	$0.19
Dividends Per Share		$0.02	$0.00
Com Shares for Basic EPS		$5.06	$5.12
Com Shares for Diluted EPS		$5.21	$5.27