Question

In: Finance

The cash flow statements for retailing giant BigBox, Inc. spanning the period 2013dash–2016 are found here:...

The cash flow statements for retailing giant BigBox, Inc. spanning the period

2013dash–2016

are found here:

LOADING...

. Answer the following questions using the information found in these statements:

a. Did BigBox generate positive cash flow from its operations?

b. How much did BigBox invest in new capital expenditures over the period?

c. Describe BigBox's sources of financing in the financial markets over the period.

d. 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 the period.

(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_from_Operating_Activities $20,700 $20,600 $18,400 $15,000
Capital_Expenditures $(16,000) $(14,500) $(14,000) $(12,300)
Cash_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_From_Financing_Activities $(10,450) $(4,650) $(2,450) $(2,500)
Net_Change_in_Cash $(5,750) $1,450 $1,950 $200

Solutions

Expert Solution

Answer a:

Yes,

BigBox has generated positive cash flows from its operations in all 4 years. The cash flow from operation shows a positive trend.

Answer b:

BigBox has invested in new capital expenditures every year over the period.

Total new capital expenditures over the period = 16000 + 14500 + 14000 + 12300 = $56,800

Answer c:

Sources of financing in the financial markets over the period is Debt. Although equity is also source of finance, but during the period the company has retired stocks and no new shares were issued.

Answer d:

Major activities of Big Box's management team over the period:

1. Net income has been positive all 4 years and cash flow from operations show a positive trend.

2. Big box is consistently investing in new capital expenditures to support growth. Capex also shows a positive trend.

3. In the years 2013, 2014 and 2015 Big Box has taken new debt /enhanced existing debt.

4. Big Box has been retiring its stock in all 4 years with maximum stock retired in 2016.

5. Big Box has been consistently paying dividends during the period. Dividend payout ratio is also increasing steadily.

  


Related Solutions

The cash flow statements for retailing giant​ BigBox, Inc. spanning the period 2013–2016 are found​ here:...
The cash flow statements for retailing giant​ BigBox, Inc. spanning the period 2013–2016 are found​ here: . Answer the following questions using the information found in these​ statements: a. Did BigBox generate positive cash flow from its​ operations? b. How much did BigBox invest in new capital expenditures over the​ period? c. Describe​ BigBox's sources of financing in the financial markets over the period. d. Based solely on the cash flow statements for 2013 through​ 2016, write a brief narrative...
The cash flow statements for retailing giant​ BigBox, Inc. spanning the period 2013dash2016 are found​ here:...
The cash flow statements for retailing giant​ BigBox, Inc. spanning the period 2013dash2016 are found​ here: (US$ millions)   12/31/2016   12/31/2015   12/31/2014   12/31/2013 Net Income    $13,070   $12,020   $11,010   $10,000 Depreciation Expense    6,550   6,300   5,050   3,980 Changes in Working Capital    1,210   2,310   2,450   1,030 Cash from Operating Activities    $20,830   $20,630   $18,510   $15,010 Capital Expenditures    $(16,000)   $(14,550)   $(14,030)   $(12,330) Cash from Investing Activities    $(16,000)   $(14,550)   $(14,030)   $(12,330) Interest and Financing Cash Flow Items    $(300)   $(290)   $(400)  ...
3–15. (Analyzing the cash flow statement) The cash flow statements for retailing giant BigBox, Inc., spanning...
3–15. (Analyzing the cash flow statement) The cash flow statements for retailing giant BigBox, Inc., spanning the period 2013–2016 are as follows: (US$ 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...
Use the​ common-size financial statements found​ here: Common-Size Balance Sheet 2016 Cash and marketable securities $...
Use the​ common-size financial statements found​ here: Common-Size Balance Sheet 2016 Cash and marketable securities $ 470 1.4 % Accounts receivable 5,990 18.2 Inventory 9,450 28.7 Total current assets $ 15,910 48.4 % Net property, plant, and equipment 16,990 51.6 Total assets $ 32,900 100.0 % Accounts payable $ 7,150 21.7 % Short-term notes 6,790 20.6 Total current liabilities $ 13,940 42.4 % Long-term liabilities 7,040 21.4 Total liabilities $ 20,980 63.8 % Total common shareholders’ equity 11,920 36.2 Total...
​(Analyzing common-size financial​ statements) Use the​ common-size financial statements found​ here: Common-Size Balance Sheet 2016 Cash...
​(Analyzing common-size financial​ statements) Use the​ common-size financial statements found​ here: Common-Size Balance Sheet 2016 Cash and marketable securities $ 500 1.5 % Accounts receivable 6,000 18.2 Inventory 9,450 28.7 Total current assets $ 15,950 48.4 % Net property, plant, and equipment 16,980 51.6 Total assets $ 32,930 100.0 % Accounts payable $ 7,240 22.0 % Short-term notes 6,750 20.5 Total current liabilities $ 13,990 42.5 % Long-term liabilities 6,990 21.2 Total liabilities $ 20,980 63.7 % Total common shareholders’...
FREE CASH FLOW Arlington Corporation's financial statements (dollars and shares are in millions) are provided here....
FREE CASH FLOW Arlington Corporation's financial statements (dollars and shares are in millions) are provided here. Balance Sheets as of December 31 2016 2015 Assets Cash and equivalents $  14,000 $  13,000 Accounts receivable 35,000 30,000 Inventories 33,265 27,000   Total current assets $ 82,265 $ 70,000 Net plant and equipment 49,000 45,000 Total assets $131,265 $115,000 Liabilities and Equity Accounts payable $ 10,800 $  9,500 Accruals 7,700 7,000 Notes payable 6,000 5,000   Total current liabilities $ 24,500 $ 21,500 Long-term bonds 15,000 15,000...
FREE CASH FLOW Arlington Corporation's financial statements (dollars and shares are in millions) are provided here....
FREE CASH FLOW Arlington Corporation's financial statements (dollars and shares are in millions) are provided here. Balance Sheets as of December 31 2016 2015 Assets Cash and equivalents $  15,000 $  13,000 Accounts receivable 30,000 25,000 Inventories 26,815 23,000   Total current assets $ 71,815 $ 61,000 Net plant and equipment 46,000 45,000 Total assets $117,815 $106,000 Liabilities and Equity Accounts payable $ 10,800 $  9,500 Accruals 7,800 6,000 Notes payable 6,200 5,200   Total current liabilities $ 24,800 $ 20,700 Long-term bonds 20,000 20,000...
FREE CASH FLOW Arlington Corporation's financial statements (dollars and shares are in millions) are provided here....
FREE CASH FLOW Arlington Corporation's financial statements (dollars and shares are in millions) are provided here. Balance Sheets as of December 31 2016 2015 Assets Cash and equivalents $ 15,000 $ 14,000 Accounts receivable 35,000 30,000 Inventories 34,420 27,000 Total current assets $ 84,420 $ 71,000 Net plant and equipment 52,000 49,000 Total assets $136,420 $120,000 Liabilities and Equity Accounts payable $ 10,300 $ 9,000 Accruals 7,300 6,000 Notes payable 7,000 5,100 Total current liabilities $ 24,600 $ 20,100 Long-term...
Here is project Y: The cash flow in year 0 is negative $23,000. The cash flow...
Here is project Y: The cash flow in year 0 is negative $23,000. The cash flow in year 1 is $32,000. The cash flow in year 2 is $26,000. The cash flow in year 3 is negative $12,000. Here is project Z: The cash flow in year 0 is negative $42,000. The cash flow in year 1 is $58,000. The cash flow in year 2 is $39,000. The cash flow in year 3 is negative $35,000. Your decision rule is...
Jafan Retailing, Balance Sheet Statement December 31, 2016 & December 31, 2017 2016 2017 Cash $   ...
Jafan Retailing, Balance Sheet Statement December 31, 2016 & December 31, 2017 2016 2017 Cash $    235,000 $    400,000 Accounts Receivable        367,200        325,000 Inventory        450,000        500,200 Prepaid Expenses        120,000        160,000 Long-term investment        100,000        300,000 Equiptment (Net)     1,050,000     1,125,000 Total Assets $ 2,322,200 $ 2,810,200 Accounts Payable $    421,000 $    411,000 Salary Payable        134,000        180,000 Interest Payable        110,000        112,000 Bonds Payable        550,000        560,000 Common Shares...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT