StudentShare solutions
Triangle menu

Cash Flow - Case Study Example

Not dowloaded yet

Extract of sample
Cash Flow

Yum Brands Inc. operates six in different segments including YUM Restaurant International, Pizza Hut (US), Taco Bell (US), KFC (US), A&W All American Food Restaurant (US), YUM Restaurant China and LJS Long John Silver’s (US). This paper comments on the difference between net cash provided by operating activities and net income by speculating on which is likely to be superior sign of profitability for the firms in the long term. The paper also comments on the data reviewed by each firm and analyze cash flow position of each firm. After analyzing the cash flows of the companies as per the information given in the case, the paper finally ends with a conclusion that comments on whether these companies has any cash flow problems or not. Net Cash Position of the Firms According to the given case study, the financial statements of the three restaurant firms for the financial year 2009 and 2010 was extracted from their respective form 10-K annual reports and the following results were found: It is important to mention that the net income of all three companies include non-controlling interest (that is, non-equity shareholders). From the above analyses it is clear that there is difference between net cash provided operating activities and net income including non-controlling interest. ...
On the other hand, net income including non-controlling interest is the income of the company from all its operations and also includes external finances such as non-controlling interest (which is basically earnings from preferential equity or other fixed financial instruments). The value is not adjusted for non-cash incomes or expenditures such as working capital and depreciation (Porter and Norton, 2010, pp.666-676). Also, it does not classify exact cash amount realised from operations. This is main reason as to why there was difference between net income including non-controlling interest and net cash provided operating activities. Regarding the speculation of which number is likely to be better indicator of long term profitability, it is generally believed that net cash provided by operating activities is better indicator. This is because it is useful to determine whether the firms will be able to make necessary future investment and pay its dues in the long term. The companies may look great from their balance sheet and income statements, but if there isn’t sufficient cash, then it might run risk of liquidation (Plewa, 1995, pp.1-18). Data Review of the Firms The summarized data review of the three firms reveals the following results: Operating cash flow/total debt – It represents the amount of total debt that could be covered from the cash flows generated by the firms from operating activities. Higher values indicate that there is sufficient cash to repay total debt. Among the three firms under observation, this ratio was highest for Panera Bread and there was a general increasing trend in the values. Operating cash flow per share – It indicates exactly how much of ...Show more


CASH FLOW Introduction The case “Eat at My Restaurant” reviews the cash flow of several companies such as Panera Bread, Starbucks, and Yum Brands. Starbucks is the premier retailer and roaster of speciality coffee and it operates in more than 50 countries around the world…
Author : lebsackreinhold
Cash Flow essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the case study on your topic
"Cash Flow"
with a personal 20% discount.
Grab the best paper

Related Essays

Mini Case in Finance and Accounting
The examination of the cash flows of the business enables the management to correctly asses the timing of the benefit or cost. Cash flows must be assessed on an after tax basis because these are the available flows to the shareholder. Furthermore, the firm must focus on the incremental cash flows rather than incremental profits as the company looks at the project as a whole.
6 pages (1500 words) Case Study
Automotive Specialties, Incorporated
Analysis of the data vii. Feasible solutions for each situation viii. Preferred solution ix. Assumptions for chosen alternative x. Summary for the Entire Learning Experience xi. Appendices xii. Work cited Process utilized in solutions and recommendations The utilized process entails the capital budgeting of a multinational organization.
8 pages (2000 words) Case Study
Cash flow statement and report
ivalent (25,000) Opening cash 40,000 Closing cash 15,000 2. (a) The cash flows from operating activities are showing a negative $ 5,000 which shows that the company has invested heavily in its working capital and also paying off its major liabilities. The cash flow statement starts from the net income taken from the income statement of the company.
5 pages (1250 words) Case Study
Financial analysis
The company has reported an increase in its annual profits from 2005 to 2007 yet it has had cash flow problems which has made the company to lack sufficient cash to pay for its obligations within the deadline. Investors are usually concerned with the overall strength of a company including the cash flows and profitability before they get to invest in the company and that is why companies should ensure positive cash flows.
5 pages (1250 words) Case Study
World Paper Company - Finance Case 18
wide Paper Company (WPC) is planning to introduce a long wood woodyard to reduce the costs spent on the short wood, and to increase its competitive strength in the paper industry. The yearly cash flows that are relevant to this company include the initial outlay, the annual
3 pages (750 words) Case Study
Accounting/Financial analysis
At the same time, the company invested too much in its current assets due to which the cash of the company blocked in those current assets.
2 pages (500 words) Case Study
Cash flows(inflow-outflow-operating,investing,financing), Depreciation, Ratios,Income Statement, Retained earning Statement, Internal control procedures
A ratio of 0.8 means that the company has fewer assets to satisfy the payment of its current liabilities in the coming future. Working Capital can
3 pages (750 words) Case Study
Case Study of Target Company
For example, the earning that have been increased from the sale of the firm assets such as land or a one-time reduction of the taxes rate due to tax lose as a result of tax loss carry forward
6 pages (1500 words) Case Study
Cash Management Techniques
General Accounting Office, 1990). The cash is usually not usually invested in assets or in the form of inventories. This report gives an analysis of credit policy polices, effective cash management
4 pages (1000 words) Case Study
Case Study
At 11%, the $75 million payment has a present value of only $1,125,000 as compared to $7,275,000 at six percent. Sloan Whitaker is likely to go before the jury because punitive damages are often added onto the economic
2 pages (500 words) Case Study
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation