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: Here is where you must step out on the ledge. What do you see, what happened, what caused it to happen? Then you must find/discover any supporting notes that back up what you found. You are on the hook for the analysis, not “Mad Money Bob Cramer.” All of your information must come from the SEC 10-K reports and not any other outside source.
Note: Students must “Start a New Thread” to provide their company’s information. The subject line of that new thread must contain, “Company Name – by Student Name.” Where it says company name that is the name of the company that the student is selecting. Where it says student name that is the student’s name who is posting the new thread.
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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