Week 4 Discussion 2 Analyzing the Statement of Cash Flows

Using the table below, explain the difference between net income and cash flow from operating activities for Techno in 2009 and analyze their cash flows for 2008 and 2009. 

(in thousands)                                                                         2009                2008 

Net income                                                                  $ 316,354 $  242,329 

Noncash charges (credits) to income  

Depreciation and amortization                               68,156              62,591 

Deferred taxes                                                               15,394              22,814

                                                                                                  $ 399,904 $  327,734 

Cash Provided (Used) by Operating Assets and Liabilities:  

Receivables                                                                    (288,174)     (49,704) 

Inventories                                                                    (159,419)   (145,554) 

Other current assets                                                    (1,470)          3,832 

Accounts payable, accrued liabilities                73,684      41,079 

Total Cash Provided by Operations                    $ 24,525 $  177,387 

Investment activities  

Additions to plant and equipment                   (94,1760)     (93,136) 

Other investment activities                                       14,408             (34,771) 

Net investment activities                                 ($ 79,768) ($ 127,907) 

Financing activities  

Purchases of treasury stock                                    (45,854)            (39,267) 

Dividends paid                                                            (49,290)            (22,523) 

Net changes in short-term borrowing          125,248             45,067 

Additions to long-term borrowings                  135,249                4,610 

Repayments of long-term borrowings   (250,564) 

Net financing activities                                      $  165,353          ($ 262,677) 

Increase (decrease) in cash                                $  110,110 ($ 213,197) 

Beginning cash balance                                                78,114    291,311 

Ending cash balance                                                 $  188,224 $    78,114  

Text 

Epstein, L. (2014). Financial decision making: An introduction to financial reports [Electronic version]. Retrieved from https://content.ashford.edu/  

Article 

Ford Motor Company. (2014). Ford Motor Company 2012 annual report (Links to an external site.)Links to an external site.. Retrieved from http://corporate.ford.com/content/dam/corporate/en/investors/reports-and-filings/Annual%20Reports/2012-annual-report.pdf  

Recommended Resources 

Article 

Heakal, R. (2010, May). What is a cash flow statement? (Links to an external site.)Links to an external site. Forbes. Retrieved from http://www.forbes.com/2010/05/27/cash-flow-statement-personal-finance-securities-analysis.html 

Website 

AccountingCoach. (2014). Cash flow statement (explanation) (Links to an external site.)Links to an external site.. Retrieved from http://www.accountingcoach.com/cash-flow-statement/explanation/1      Read Parts 1 through 8