Cash Flow Analysis Modified UCA Cash Flow Format
[Pages:58]Cash Flow Analysis Modified UCA Cash Flow Format
Dr. Charles W. Mulford Invesco Chair and Professor of Accounting
Scheller College of Business Georgia Institute of Technology
Atlanta, GA 30332-0520 (404) 894-4395
C. Mulford: Cash Flow Analysis, p. 1
Analyzing Cash Flows
Selected income statement data and a cash flow statement in the UCA format are provided below for 5 cases. Each case is a variation on the income and cash flow statement for the same company. In fact, in every case, the company reports the same net income.
Use the data provided to draw what conclusions you can about the company's ability to service its outstanding long-term debt.
What additional questions are raised and what additional information would be helpful in answering them?
C. Mulford: Cash Flow Analysis, p. 2
Income Statement Statement Data
Cases 1 - 3
Amounts in (000's) Sales
Cost of Goods Sold (incl. dep'n of $800) SG&A Operating Income Other Income (Expense) Interest Expense Pretax Income Tax Provision Net Income
Case 4
Amounts in (000's) Sales
Cost of Goods Sold (incl. dep'n of $800) SG&A Operating Income Other Income (Expense) Interest Expense Pretax Income Tax Provision Net Income
$ 4,960 1,920 140 (240)
$ 5,600 2,240 1,100 (240)
$ 8,000
6,880 1,120
(100) 1,020
250 $ 770
$ 8,000
7,840 160
860 1,020
250 $ 770
C. Mulford: Cash Flow Analysis, p. 3
CASE 1: Cash Flow Statement (000's)
Revenue Change in receivables Cash from revenue Cost of revenue (excl. depn of 800) Change in Inventory Change in A/P Cash cost of revenue Cash gross margin Cash Operating Expense Core operating cash flow
$ 8,000 (500)
(4,160) (300) 200
Other recurring cash receipts (payments) Total Tax Provision Inc (Dec) in Deferred Tax Liability Inc (Dec) in Income Taxes Payable Income Taxes Paid Cash available for debt service
(250) 40
(42)
Interest paid Operating cash flow
Capital Expenditures Free cash flow
Investments Change in cash and equivalents before financing
Required principal payments on LT debt Dividends on common stock Short-term debt Long-term debt financing Equity financing Financing transactions Change in cash and equivalents after financing
$ 7,500
(4,260) 3,240
(1,920) 1,320 (18)
(252) 1,050
(240) 810
(1,000) (190)
0 (190)
(310)
500 0
190 $ 0
C. Mulford: Cash Flow Analysis, p. 4
CASE 2: Cash Flow Statement (000's)
Revenue Change in receivables Cash from revenue Cost of revenue (excl. depn of 800) Change in Inventory Change in A/P Cash cost of revenue Cash gross margin Cash Operating Expense Core operating cash flow
$ 8,000 (1,800)
(4,160) (1,200)
600
Other recurring cash receipts (payments) Total Tax Provision Inc (Dec) in Deferred Tax Liability Inc (Dec) in Income Taxes Payable Income Taxes Paid Cash available for debt service
(250) 40
(42)
Interest paid Operating cash flow
Capital Expenditures Free cash flow
Investments Change in cash and equivalents before financing
Required principal payments on LT debt Dividends on common stock Short-term debt Long-term debt financing Equity financing Financing transactions Change in cash and equivalents after financing
$ 6,200
(4,760) 1,440
(1,920) (480)
(18)
(252) (750)
(240) (990)
(1,000) (1,990)
0 (1,990)
(310)
1,300 1,000
0 1,990 $ 0
C. Mulford: Cash Flow Analysis, p. 5
CASE 3: Cash Flow Statement (000's)
Revenue Change in receivables Cash from revenue Cost of revenue (excl. depn of 800) Change in Inventory Change in A/P Cash cost of revenue Cash gross margin Cash Operating Expense Core operating cash flow
$ 8,000 (500)
(4,160) (300) 200
Other recurring cash receipts (payments) Total Tax Provision Inc (Dec) in Deferred Tax Liability Inc (Dec) in Income Taxes Payable Income Taxes Paid Cash available for debt service
(250) (950)
(42)
Interest paid Operating cash flow
Capital Expenditures Free cash flow
Investments Change in cash and equivalents before financing
Required principal payments on LT debt Dividends on common stock Short-term debt Long-term debt financing Equity financing Financing transactions Change in cash and equivalents after financing
$ 7,500
(4,260) 3,240
(1,920) 1,320 (18)
(1,242) 60
(240) (180)
0 (180)
0 (180)
(310)
490 0
180 $ 0
C. Mulford: Cash Flow Analysis, p. 6
CASE 4: Cash Flow Statement (000's)
Revenue Change in receivables Cash from revenue Cost of revenue (excl. depn of 800) Change in Inventory Change in A/P Cash cost of revenue Cash gross margin Cash Operating Expense Core operating cash flow
$ 8,000 (500)
(4,800) (300) 200
$ 7,500
(4,900) 2,600
(2,240) 360
Other recurring cash receipts (payments) Total Tax Provision Inc (Dec) in Deferred Tax Liability Inc (Dec) in Income Taxes Payable Income Taxes Paid Cash available for debt service
(250) 40
(42)
942
(252) 1,050
Interest paid Operating cash flow
(240) 810
Capital Expenditures
0
Free cash flow
810
Investments
0
Change in cash and equivalents before financing
810
Required principal payments on LT debt Dividends on common stock Short-term debt Long-term debt financing Equity financing Financing transactions Change in cash and equivalents after financing
(310)
(500) 0
(810) $ 0
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