Question

In: Accounting

rite aid 2020 10-k filing 1. Describe investments reported on your corporation's Statement of Cash Flows...

rite aid 2020 10-k filing

1. Describe investments reported on your corporation's Statement of Cash Flows in the current and most recent past year.

2. Review your corporation's Statement of Cash Flows over the past 3 years and explain any financing trends.

Be Sure To Include Your Calculations For Your Final Answer For the Free Cash Flow!

3. Calculate the following ratio for the most recent two years and comment on the results of your ratio analysis. How does the result for your corporation compare to the industry average?

a. Free cash flow Free cash flow = Net cash provided by operating activities - capital expenditures - dividends

Expert Solution

1. Investments reported on your corporation's Statement of Cash Flows in the current and most recent past year -

Analysis -

2018 Company has invested $185,879,000 in property plan and equipments. Majourly in 2018 investment has been done in property plant and equipment. Company tried to expanding its business and generate more revenue from the assets acquired.

2019 also company has invested majority of the fund in acquiring property plant and equipment more than previous year $196,778,000. Which leads to major portion of the investments. As the company may have short of cash hence investment has been done from financing long term debt.

2020 Company has invested in property plant and equipment $171,705,000 which is comparitivly less but major portion of the investment activity.

2. Review your corporation's Statement of Cash Flows over the past 3 years and explain any financing trends.

Analysis -

In 2018 Company has good cash inflow from operating activities and left over balance after investment a huge portion in property plan and equipment hence in 2018 company has made payment to revolver.

In 2019 company has refinance it fund from long term debt and revolver proceeds as the company has made huge investment in property plant and equipment. Also they have replayed some portion of debt in this year.

In 2020 company continues his trend to invest in property plant and equipment and borrowed fund from long term loans to acquire more investments.

c. Free cash flow Free cash flow = Net cash provided by operating activities - capital expenditures - dividends

Except 2019 company has good free cash flow to pay its obligations. As higher the ratios indicate good opportunity for the company as it shows the cash strength of the company.

In the year 2018 and 2019 company has good free cash flow hence they have cleared some portion of long term debt from it.

ekkarill92 answered 2 years ago

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