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3–14. (Analyzing the cash flow statement) (Related to Checkpoint 3.3) Google, Inc. (GOOG), is one of the most successful internet firms, and it experienced very rapid growth in revenues from 2011 through 2014. The cash flow statements for Google, Inc., spanning the period are as follows:
|
(US$ millions) |
12/31/2014 |
12/31/2013 |
12/31/2012 |
12/31/2011 |
|
Net income |
$ 14,444 |
$ 12,920 |
$ 10,737 |
$ 9,737 |
|
Depreciation |
3,523 |
2,781 |
1,988 |
1,396 |
|
Amortization |
1,456 |
1,158 |
974 |
455 |
|
Deferred taxes |
(104) |
(437) |
(266) |
343 |
|
Noncash items |
2,693 |
2,268 |
2,288 |
2,004 |
|
Changes in working capital |
364 |
(31) |
898 |
630 |
|
Cash flow from operating activities |
$ 22,376 |
$ 18,659 |
$ 16,619 |
$ 14,565 |
|
Capital expenditures |
(10,959) |
(7,358) |
(3,273) |
(3,438) |
|
Other investing cash flow items, total |
(10,096) |
(6,321) |
(9,783) |
(15,603) |
|
Cash flow from investing activities |
(21,055) |
(13,679) |
(13,056) |
(19,041) |
|
Interest and financing cash flow items |
(1,421) |
(300) |
(99) |
81 |
|
Total cash dividends paid |
− |
− |
− |
− |
|
Issuance (retirement) of stock, net |
− |
− |
− |
− |
|
Issuance (retirement) of debt, net |
(18) |
(557) |
1,328 |
726 |
|
Cash flow from financing activities |
(1,439) |
(857) |
1,229 |
807 |
|
Foreign exchange effects |
(433) |
(3) |
3 |
22 |
|
Net Change in Cash |
(551) |
4,120 |
4,795 |
(3,647) |
Answer the following questions using the information found in these statements:
Is Google generating positive cash flow from its operations?
How much did Google invest in new capital expenditures over these four years?
Describe Google’s sources of financing in the financial markets over these four years.
Based solely on the cash flow statements for 2011 through 2014, write a brief narrative that describes the major activities of Google’s management team over these four years.
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3–15. (Analyzing the cash flow statement) The cash flow statements for retailing giant BigBox, Inc., spanning the period 2013–2016 are as follows:
| (US$ millions) | 12/31/2016 | 12/31/2015 | 12/31/2014 | 12/31/2013 |
|---|---|---|---|---|
| Net income | $ 13,000 | $ 12,000 | $ 11,000 | $ 10,000 |
| Depreciation expense | 6,500 | 6,300 | 5,000 | 4,000 |
| Changes in working capital | 1,200 | 2,300 | 2,400 | 1,000 |
| Cash flow from operating activities | $ 20,700 | $ 20,600 | $ 18,400 | $ 15,000 |
| Capital expenditures | $ (16,000) | $ (14,500) | $ (14,000) | $ (12,300) |
| Cash flow from investing activities | $ (16,000) | $ (14,500) | $ (14,000) | $ (12,300) |
| Interest and financing cash flow items | $ (350) | $ (250) | $ (350) | $ 100 |
| Total cash dividends paid | (3,600) | (2,800) | (2,500) | (2,200) |
| Issuance (retirement) of stock | (8,000) | (1,500) | (3,600) | (4,500) |
| Issuance (retirement) of debt | 1,500 | (100) | 4,000 | 4,100 |
| Cash flow from financing activities | $ (10,450) | $ (4,650) | $ (2,450) | $ (2,500) |
| Net change in cash | $ (5,750) | $ 1,450 | $ 1,950 | $ 200 |
Answer the following questions using the information found in these statements:
Does BigBox generate positive cash flow from its operations?
How much did BigBox invest in new capital expenditures over these four years?
Describe BigBox’s sources of financing in the financial markets over these four years.
Based solely on the cash flow statements for 2013 through 2016, write a brief narrative that describes the major activities of BigBox’s management team over these four years.
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What does respecting your employer’s resources mean?
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Please show how to calculate in excel!
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| Bethesda Mining Company reports the following balance sheet information for 2018 and 2019. |
| BETHESDA MINING COMPANY Balance Sheets as of December 31, 2018 and 2019 |
|||||||||||||
| 2018 | 2019 | 2018 | 2019 | ||||||||||
| Assets | Liabilities and Owners’ Equity | ||||||||||||
| Current assets | Current liabilities | ||||||||||||
| Cash | $ | 31,982 | $ | 41,399 | Accounts payable | $ | 193,422 | $ | 201,111 | ||||
| Accounts receivable | 58,781 | 79,139 | Notes payable | 88,520 | 140,088 | ||||||||
| Inventory | 131,971 | 198,632 | |||||||||||
| Total | $ | 281,942 | $ | 341,199 | |||||||||
| Total | $ | 222,734 | $ | 319,170 | |||||||||
| Long-term debt | $ | 244,000 | $ | 180,750 | |||||||||
| Owners’ equity | |||||||||||||
| Common stock and paid-in surplus | $ | 211,000 | $ | 211,000 | |||||||||
| Accumulated retained earnings | 143,239 | 175,549 | |||||||||||
| Fixed assets | |||||||||||||
| Net plant and equipment | $ | 657,447 | $ | 589,328 | Total | $ | 354,239 | $ | 386,549 | ||||
| Total assets | $ | 880,181 | $ | 908,498 | Total liabilities and owners’ equity | $ | 880,181 | $ | 908,498 | ||||
| Calculate the following financial ratios for each year: | |
| a. | Current ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| b. | Quick ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| c. | Cash ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| d. | Debt-equity ratio and equity multiplier. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| e. | Total debt ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
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| High Flyer, Inc., wishes to maintain a growth rate of 14.5 percent per year and a debt-equity ratio of .6. The profit margin is 4.4 percent, and total asset turnover is constant at 1.14. | |
| a. | What is the dividend payout ratio? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| b. | What is the maximum sustainable growth rate for this company? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
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A couple has just purchased a home for $384,100.00. They will pay 20% down in cash, and finance the remaining balance. The mortgage broker has gotten them a mortgage rate of 5.64% APR with monthly compounding. The mortgage has a term of 30 years.
How much interest is paid in the first year?
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examples as well
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Sara purchased 50 shares of Apple stock at $190.97 per share using the prevailing minimum initial margin requirement of 55%.
She held the stock for exactly 4 months and sold it without any brokerage costs at the end of that period. During the 4-month holding period, the stock paid $1.49 per share in cash dividends.
Sara was charged 4.8% annual interest on the margin loan. The minimum maintenance margin was 25%.
a. Calculate the initial value of the transaction, the debit balance, and the equity position on Sara's transaction.
b. For each of the following share prices, calculate the actual margin percentage, and indicate whether Sara's margin account would have excess equity, would be restricted, or would be subject to a margin call: (1)$174.81, (2)$206.54,and (3)$122.35.
c. Calculate the dollar amount of (1) dividends received and (2) interest paid on the margin loan during the 4-month holding period.
d. Use each of the following sale prices at the end of the 4-month holding period to calculate Sara's annualized rate of return on the Apple stock transaction: (1)$185.83, (2) $195.99, and (3)$205.89.
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