Respond to each of the following:
Category: Cash Flows Horizontal Trend Analysis
1. Provide a table with the following selected information for the most recent five years comprised of the following Statement of Cash Flows elements:
a. Net Income
b. Net Cash provided/used by Operating Activities
c. Net Cash provided/used by Investing Activities
d. Net Cash provided/used by Financing Activities
2. Prepare a horizontal trend analysis for the most recent five years comprised of the following Statement of Cash Flows elements:
a. Net Income
b. Net Cash provided/used by Operating Activities
c. Net Cash provided/used by Investing Activities
d. Net Cash provided/used by Financing Activities
Note: you must set the fifth year least recent as the base year and index to the most recent year. Suggestion, see my example on what a horizontal trend analysis is to look like.
Note: Be careful of outflow values. In a horizontal trend analysis we are measuring an indexed value increase/decrease from the base year. Therefore, if the base year value is negative $150 and the next most recent year the negative value is only $50 we have in fact reduced our outflow of cash. We would represent this with both values in brackets stating at the base year with a (100.0) value. The next most recent year would have an index value of ($50)/($150) x 100 = (33.3) which reflect that we still have an outflow of cash but only at negative 33.3% of the original base year value. The trouble comes when we shift on any one line from negative to positive values. For, this example, in the current year we have a $25 cash inflow vice outflow. We have gone from ($150) to $25. This means we push an overall inflow of $175 from the beginning year negative outflow. Therefore, did we have a 16.7% or a 116.7% increase in the inflow of funds between the least and most current year figures set to the base year value? We had a 116.7% jump in the inflow of funding for the most current year set to base year valuation.
Note: I have seen some textual material that discusses horizontal trend analysis vs. horizontal percentage analysis. None have demonstrated the Statement of Cash Flows. This is therefore, new ground for us and I believe it worth of our study and exploration. On that note, follow the instructions provided, be sure that you review my example with the Boston Beer Company and I assure you that I will be understanding as we make our exploration.
3. Analysis: Review the values and trend information that had been presented in parts 1 & 2. Identify one or two trend(s) to discuss.
> Present your observation in a short bullet style note.
> Provide reason(s) for the trend you observed.
> Be sure that there is a cause and effect in your observed reasons. The reason drives the trend that you observed.
> Be sure that you present it in short, logical and brief (bullet style) notes and document (cite) any sources that you discover in the notes.
Note: Round all calculations to one decimal place. Note: All information presented that was found in the financial reports must be documented.
· Use APA style and in addition, page number(s) must be presented for each in text citation.
o Except for directly quoted material, page numbers are not mandatory in APA style but I am making them mandatory for credit in this presentation.
· Present source document as a bibliography complete with the exact url that will directly lead the reader to the exact SEC 10K annual report.
o Additionally, you must provide a date accessed.
o Again APA does not mandate this for fixed website, I am making it mandatory for credit.
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