Analyzing Statement of Cash Flows

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The purpose of this assignment is to analyze a statement of cash flows to determine the financial strengths and weaknesses of a company.

Understanding a company’s major sources and uses of cash, and how cash is being used in the business through the analysis of the statement of cash flows, is essential. This analysis guides financial decision-making and is used to determine financial strengths and weaknesses within the company.

The accounting manager has asked you to prepare a 5- to 10-minute presentation for company stakeholders summarizing your analysis of the statement of cash flows and the financial strengths and weaknesses of the company.

Using the company that you selected from the approved list, review the Management Discussion and Analysis (MD&A) section of the annual report and the management’s discussion regarding the statement of cash flows or any discussion on the operating, investing, or financing activities of the company. In addition, refer to the statement of cash flows financial statement.

Create a PowerPoint presentation (5-8 slides) that summarizes your analysis and addresses the following. Include screenshots from the statement of cash flows as needed to illustrate key findings and information.

  1. Discuss the company’s major sources of cash in each of the three sections of the statement of cash flows. Provide at least two major sources of cash for each section.
  2. Discuss the company’s major uses of cash in each of the three sections of the statement of cash flows. Provide at least two major sources of cash for each section.
  3. Discuss the major differences between the net income and the cash provided or used by operating activities, and explain the cause of the major difference between the two values. Note that you may need to reconcile the differences between net income reported and the subtotal of cash provided or used by "operating" activities. What were the reconciling items, how were these accounts adjusted, and why do we not just report "net income" without adjustments?
  4. Summarize the financial strengths of the business and justify your analysis based on evidence in the statement of cash flows. Include discussion as to whether or not you anticipate the company will experience continued success and explain your answer. Only information from the statement of cash flow should be referenced. Note that this analysis will be more than just the amounts of either the cash provided or used. You may need to review the notes in the MD&A for additional information.
  5. Summarize the financial weaknesses of the business and justify your analysis based on evidence in the statement of cash flows. Include discussion as to whether or not you anticipate the company will experience continued challenges in this area and explain your answer. Only information from the statement of cash flows should be referenced. Note that this analysis will be more than just the amounts of either the cash provided or used. You may need to review the notes in the MD&A for additional information.

General Requirements:

Refer to the resource, "Creating Effective PowerPoint Presentations," located in the Student Success Center, for additional guidance on completing this assignment in the appropriate style.

Using the PowerPoint you created, practice your presentation. Speaker notes are not required. Use Loom to record your 5- to 10-minute presentation for the company stakeholders and submit the PowerPoint presentation, with the embedded Loom link on the title slide of the presentation, to the instructor. Refer to the provided resources for additional guidance on recording your presentation with Loom.

While APA style is not required for the body of this assignment, solid academic writing is expected, and documentation of sources should be presented using APA formatting guidelines, which can be found in the APA Style Guide, located in the Student Success Center.

List of companies you can use:

The most recent annual reports for the following companies will be used throughout the course and can be found either on the U.S. Securities and Exchange Commission (SEC) website or on each company’s website. Ensure that you utilize the annual report for the Ticker symbol associated with the company.

  1. The Coca-Cola Co. (Ticker KO)
  2. PepsiCo (Ticker PEP)
  3. Home Depot (Ticker HD)
  4. Lowe’s (Ticker LOW)
  5. Gap, Inc. (Ticker GPS)
  6. Abercrombie and Fitch Co. (Ticker ANF)
  7. Ford Motor Co. (Ticker F)
  8. General Motors Co. (Ticker GM)
  9. Dunkin’ Brands, Inc. (Ticker DNKN)
  10. Starbucks Corp. (Ticker SBUX)