Question

Apply a vertical analysis to this statement of cash flows.

Cash from Operations	20X7	20X6	20X5
Net Income	$1100	$900	$590
Change in Accounts Receivable	(706)	(230)	55
Change in Accounts Payable	150	65	70
Change in Inventory	(50)	15	25
Depreciation	205	100	65
Net Cash from Operations	$699	$850	$805

Cash from Investing	20X5	20X6	20X7
Additions to Property, Plant, & Equipment	$(850)	$(760)	$(861)
Proceeds from Sale of Securities	65	36	15
Net Cash from Investing	$(785)	$(724)	$(846)
Cash from Financing	20X5	20X6	20X7
Long-term Debt Borrowing	$450	$150	$34
Cash Dividends	(140)	(95)	(65)
Net Cash from Financing	$310	$55	$(21)
Increase(decrease)in Cash	$224	$181	$(62)

Answer 1

A	B	C	D	E	F	G	H	I	J	K
2
3		In the vertical analysis of cash flow statement, each line item is represented as % of net change in cash.
4			Cash Flow Statement				Vertical Analysis
5		Cash from Operations	20X7	20X6	20X5		20X7	20X6	20X5
6		Net Income	$1,100	$900	$590		491.07%	497.24%	-951.61%
7		Change in Accounts Receivable	($706)	($230)	$55		-315.18%	-127.07%	-88.71%
8		Change in Accounts Payable	$150	$65	$70		66.96%	35.91%	-112.90%
9		Change in Inventory	($50)	$15	$25		-22.32%	8.29%	-40.32%
10		Depreciation	$205	$100	$65		91.52%	55.25%	-104.84%
11		Net Cash from Operations	$699	$850	$805		312.05%	469.61%	-1298.39%
12		Cash from Investing	20X5	20X6	20X7		20X5	20X6	20X7
13		Additions to Property, Plant, & Equipment	($850)	($760)	($861)		-379.46%	-419.89%	1388.71%
14		Proceeds from Sale of Securities	$65	$36	$15		29.02%	19.89%	-24.19%
15		Net Cash from Investing	($785)	($724)	($846)		-350.45%	-400.00%	1364.52%
16
17		Cash from Financing	20X5	20X6	20X7		20X5	20X6	20X7
18		Long-term Debt Borrowing	$450	$150	$34		200.89%	82.87%	-54.84%
19		Cash Dividends	($140)	($95)	($65)		-62.50%	-52.49%	104.84%
20		Net Cash from Financing	$310	$55	($21)		138.39%	30.39%	33.87%
21		Increase(decrease)in Cash	$224	$181	($62)		100.00%	100.00%	100.00%
22

Formula sheet

A	B	C	D	E	F	G	H	I	J	K
2
3		In the vertical analysis of cash flow statement, each line item is represented as % of net change in cash.
4			Cash Flow Statement				Vertical Analysis
5		Cash from Operations	20X7	20X6	20X5		20X7	20X6	20X5
6		Net Income	1100	900	590		=D6/D$21	=E6/E$21	=F6/F$21
7		Change in Accounts Receivable	-706	-230	55		=D7/D$21	=E7/E$21	=F7/F$21
8		Change in Accounts Payable	150	65	70		=D8/D$21	=E8/E$21	=F8/F$21
9		Change in Inventory	-50	15	25		=D9/D$21	=E9/E$21	=F9/F$21
10		Depreciation	205	100	65		=D10/D$21	=E10/E$21	=F10/F$21
11		Net Cash from Operations	699	850	805		=D11/D$21	=E11/E$21	=F11/F$21
12		Cash from Investing	20X5	20X6	20X7		20X5	20X6	20X7
13		Additions to Property, Plant, & Equipment	-850	-760	-861		=D13/D$21	=E13/E$21	=F13/F$21
14		Proceeds from Sale of Securities	65	36	15		=D14/D$21	=E14/E$21	=F14/F$21
15		Net Cash from Investing	-785	-724	-846		=D15/D$21	=E15/E$21	=F15/F$21
16
17		Cash from Financing	20X5	20X6	20X7		20X5	20X6	20X7
18		Long-term Debt Borrowing	450	150	34		=D18/D$21	=E18/E$21	=F18/F$21
19		Cash Dividends	-140	-95	-65		=D19/D$21	=E19/E$21	=F19/F$21
20		Net Cash from Financing	310	55	-21		=D20/D$21	=E20/E$21	=F20/F$21
21		Increase(decrease)in Cash	=D11+D15+D20	=E11+E15+E20	=F11+F15+F20		=D21/D$21	=E21/E$21	=F21/F$21
22