Statement of Cash flows Mini Research Assignment: 10-K.

Statement of Cash flows Mini Research Assignment: 10-K
Pull the 10-K for the business of your choice (preferably the one used for the Financial
Statement Analysis project). You should already be familiar with the 10-K considering
the activities and discussion assignment from previous modules.
For this project, analyze the statement of cash flows then answer the questions below.
The answers must be in complete sentences and provide details. Points will be
deducted if there are no details. Save a copy of this directions page then provide your
answers directly under the questions listed below. Submit this Word document
AND a copy of the Statement of Cash Flows via the link provided. If there is
no copy of the Statement of Cash flows, you will lose points.
1.) Do they use the direct or indirect method to report operating cash flows? How can
you tell? (5 points)
Provide your answers in the box below:
Apple Inc makes use of indirect method of cash flow. This is because while
preparing the cash flow statement under the direct method the net profit for the
period is used as the base of and then the adjustment is made for the items which
is effected in the income statement but did not created an effect on the cash. To
support the statement, Apple at the time of preparing the cash flow statement
under the indirect method, the non-cash and the operating charges in the income
statement are added into the net profit whereas the non-cash and non-operating
credits has been deducted to compute the Operating Profit Working Capital
Changes. The indirect method of preparing the cash flow statement is regarded as
the partial conversation of accrual basis profit to the cash basis profit. In addition
to this, Apple INC. has made necessary adjustment for increase as well as
decrease in the current asset and current liabilities to obtain the Net cash flow
from the operating activities under the indirect method.
2.) For this question, we will discuss the financial decisions of the company. Use some
of the skills/information you've learned in this chapter to answer this question. It will
require critical thinking and analysis of the cash flow statement. Supply at least three
paragraphs (3-6 sentences for each paragraph) summarizing the cash inflows and cash
outflows in relation to the financial position of the company.
Operating Activities Section:
Discuss the cash provided or used by operating activities. Were there any big changes
from one year to another? If there was, what contributed to these change? Explain.
Look for details in the notes to the financial statements, if necessary. (5 points
total)
Investing Activities Section:
Discuss the trend in cash provided by investing activities. Do you see a small incline
each year, why or why not? Is there was a dip from one year to the next? If there is,
what could have contributed to that dip in cash provided by operating activities? Look
for details in the notes to the financial statements, if necessary. (5 points total)
Financing Activities Section:
Discuss dividends paid, if there were any during the period. If dividends were paid,
what is the amount paid compared to net cash provided by operating activities?
(Provide a percentage of income that was used to pay dividends). Do you think the
ratio makes sense? Why or why not? If there were no dividends paid under the
financing activities sections, discuss other activities under this section. Look for details