Posted: December 15th, 2016

Does the company generate enough cash from operating activities to fund their investing activities?

5. Analysis of the Cash Flow Statement 1) What is the largest source of cash? 2) What is the largest use of cash? 3) Does the company generate enough cash from operating activities to fund their investing activities? 4) Reference the cash flow statement (third exhibit that you attach) 6. Return Ratio Analysis ROE, ROA, RoFL 7. Profitability Ratio Analysis Profit Margin, Gross Margin, and Operating Expense to Sales 8. Liquidity Ratio Analysis Current Ratio, Quick Ratio, Operating Cash Flow to Current Liabilities 9. Solvency Ratio Analysis Debt to Total Assets, Debt to Equity, and Times Interest Earned Note: Use the outline below to guide your discussion of the ratios Ratio Analysis NOTE: repeat the analysis outlined below for each of the 4 categories above: ROE & ROA, Profitability, Liquidity, Solvency). 1. Compare your company to itself over time a. Focus on the graph (reference graphs) b. Using the more current years as the point of reference i. Use values for the company: are values increasing, decreasing or consistent ii. Is the company improving, worsening, or stable? 2. Compare your company to the industry benchmark a. Focus on the table (reference the table) b. Compare your company to the industry year by year i. Use company as the point of reference ii. Use value for the company and for the industry: are company values higher, lower or the same iii. Is company better, worse, or the same as the industry average 3. Draw a conclusion for each set of ratios (ROE & ROA, Profitability, Liquidity, Solvency) a. Improving or worsening over time not just for each ratio, but in each category b. Is the company better, worse, or average compared to the industry for each category? 10. Conclusion Summarize the company’s financial health. 1. Trend: growing or consolidating / thriving or struggling 2. Return…. 3. Profitability is …. 4. Liquidity is …. 5. Solvency is …. 6. Overall the company’s financial health is strong, weak, averag