Question

Cash Flow Flag INCOME STATEMENT
Fiscal year ends in December. USD in millions except per share data.	2013-12	2014-12	2015-12	2016-12	2017-12	TTM
Revenue	220156	200494	129925	110215	134674	154945
Cost of revenue	148882	136464	90788	78778	95114	110718
Gross profit	71274	64030	39137	31437	39560	44227
Costs and expenses
Sales, General and administrative	4510	4494	4443	4684	4448	4358
Interest expense				201	307	731
Other operating expenses	30859	28334	29852	28712	25584	21980
Total costs and expenses	35369	32828	34295	33597	30339	27069
Income before income taxes	35905	31202	4842	-2160	9221	17158
Provision for income taxes	14308	11892	132	-1729	-48	2903
Net income from continuing operations	21597	19310	4710	-431	9269	14255
Other	-174	-69	-123	-66	-74	-50
Net income	21423	19241	4587	-497	9195	14205
Net income available to common shareholders	21423	19241	4587	-497	9195	14205
Earnings per share
Basic	11.18	10.21	2.46	-0.27	4.88	7.49
Diluted	11.09	10.14	2.45	-0.27	4.85	7.43
Weighted average shares outstanding
Basic	1916	1884	1868	1872	1883	1897
Diluted	1932	1898	1875	1873	1898	1914
EBITDA	41399	36519	17327	17498	28877	36791

Write one-page of text that discusses the overall trend assessment regarding positive and negative values of this company’s Statement of Cash Flows for the last three years minimum. According to the Statement of Cash Flows, is this corporation performing well? Why or why not? Also discuss the trends of this company's Free Cash Flow.

Answer 1

The above statement tells us about the cash flow position of company for past 5 years from which it can be said

• Net income till 4 years is decreasing compared to 1 year which is due to fall in companies sales revenue that is revenue decreased from 220156 to 134674 and than increased to 154945
• Expenses are in line with revenues they are also decreasing as revenue is decreasing .
• company started to increase its net income from 5 year which is due to increase in revenue and decrease in operating expenses.
• Negative net income in 4th year is due to cost been more than revenue.
• company has also involved in some loan or funding activity as it shows interest expenses are paid.
• Company has approx equal no of shares both in form of basic and convertible to equity shares.

Free cash flow means amount available after payment of capital expenditures and operating expenses from cash flow from operations it is calculated as

CASH FLOW FROM OPERATIONS - CAPITAL EXPENDITURES

OR

NET INCOME+NON CASH EXPENSES- INCREASE IN WORKING CAPITAL- CAPITAL EXPENDITURES.

So as there are no capital expenditures in 5 years so free cash flow available is equal to net income for all the years.

Still it can not be perfectly commented for free cash flow as there is no balance sheet available  and we do not know about capital expenditures as interest is also paid

The company was not performing good till 4 years but from 5 year there is boost in the revenues and also positive net income.