Account Statement Analysis - Desklib

Running head: ACCOUNT STATEMENT ANALYSIS
Account statement analysis
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1ACCOUNT STATEMENT ANALYSIS
Table of Contents
Answer 1....................................................................................................................................2
Answer 2....................................................................................................................................2
Answer 3....................................................................................................................................2
Answer 4....................................................................................................................................2
Answer 5....................................................................................................................................2
Answer 6....................................................................................................................................3
Answer 7....................................................................................................................................3
Answer 8....................................................................................................................................3
Answer 9....................................................................................................................................3
Answer 10..................................................................................................................................4
Answer 11..................................................................................................................................4
Answer 12..................................................................................................................................4
Answer 13..................................................................................................................................4
Answer 14..................................................................................................................................5
Answer 15..................................................................................................................................5
Answer 16..................................................................................................................................5
Answer 17..................................................................................................................................6
Answer 18..................................................................................................................................7

2ACCOUNT STATEMENT ANALYSIS
Answer 1
c. The higher book depreciation $ 100 million will lower pre-tax book income by $ 100
million. It will lower deferred tax expenses by $ 35 million but will not affect current taxes.
Thus, the net income will be lower by $ 65 million less net income but the higher
depreciation of $ 100 million will be added back and there will be a smaller add back of
deferred taxes of $ 35. This will leave the operating cash flow unchanged.
Answer 2
b. The impairment losses are added back because they lower net income but do not result in
any operating payments.
Answer 3
a.Cemex books its share of equity accounted investees when they report profits. However,
Cemex does not receive cash at that time. It receives cash when dividends are received.
Therefore, it subtracts the equity income, net of any dividends received on the indirect format
because it is income that is not received in cash.
Answer 4
b. It is a gain included in net income that is not an operating inflow. Instead, it is included in
investing inflow as part of proceeds from sale.
Answer 5
c. The company added back financial expenses in one line of the operating cash flows and
then subtracted the related payments in a separate line item in the operating section of the
cash flow statement.