财务报表分析与用 杰拉尔德 课后答案英文版第三章.docVIP

Chapter 3 - Solutions Overview: Problem Length Problem #’s S 1, 3 M 2, 7, 8, 12, 13 L 4 - 6, 9 - 11, 14, 15 1. S a. Palomba Pizza Stores Statement of Cash Flows Year Ended December 31, 2000 Cash Flows from Operating Activities: Cash Collections from Customers Cash Payments to Suppliers Cash Payments for Salaries Cash Payments for Interest Net Cash from Operating Activities Cash Flows from Investing Activities: Sales of Equipment Purchase of Equipment Purchase of Land Net Cash for Investing Activities Cash Flows from Financing Activities: Retirement of Common Stock Payment of Dividends Net Cash for Financing Activities Net Increase in Cash Cash at Beginning of Year Cash at End of Year $ 250,000 85,000 45,000 10,000 38,000 30,000 14,000 25,000 35,000 $ 110,000 6,000 60,000 $ 44,000 50,000 $ 94,000 b. Cash Flow from Operations CFO measures the cash generating ability of operations, in addition to profitability. If used as a measure of performance, CFO is less subject to distortion than net income. Analysts use the CFO as a check on the quality of reported earnings, although it is not a substitute for net income. Companies with high net income and low CFO may be using overly aggressive income recognition techniques. The ability of a firm to generate cash from operations on a consistent basis is one indication of the financial health of the firm. Analysts search for trends in CFO to indicate future cash conditions and potential liquidity or solvency problems. Cash Flow from Investing Activities CFI reports how the firm is investing its excess cash. The analyst must consider the ability of the firm to continue to grow and CFI is a good indication of the attitude of management in this area. This component of total cash flow includes the capital expenditures made by management to maintain and expand productive capacity. Decreasing CFI may be a forecast of slower future growth. Cash Flow from Financing CFF indicates the sources of f