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Principles of managerial accounting
Finance & Accounting
Pages 4 (1004 words)
Your name Finance and Accounting Professor’s name June 18, 2013 Answers to Questions 1. Cash Flows Information What information does the cash flow statement provide that you cannot see in the other financial statements (income statement, balance sheet, owner’s equity)?
As a rule, one should look at cash flow statement, as” if the cash obtained from operating activities is greater than the derived net income, company is in a healthy position, but if it is reported otherwise, something is wrong, and management should be concerned on this. (Accounting Coach) It is different for investors because for investors more cash coming in means increases in dividends, opportunities for expansions, and payment of debts, and would improve stockholders value. 2. Apple's Cash Flow Review the cash flow statement for Apple. How would you summarize Apple’s cash flow position and what does this statement tell you about where the money is coming from and where it’s going? What should Apple do to improve its cash position and why? A review of the yearly cash flow statement of AAPL from 2010 to 2012 shows that the cash used for operating have been larger than the reported income so it is assumed that some strategies of the company are not attuned with the operations and investing activities. (Yahoo Finance, 2013) For instance, a lot of cash are tied up in accounts receivables and in heavy investments. AAPL cash flow states Investors are happy since dividends are paid regularly and obligations are met as they fell due. ...
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