Please show your work. Liquidity Performance Analysis 1. Do a Cahs Flow Liquidit
ID: 2328497 • Letter: P
Question
Please show your work.
Liquidity Performance Analysis
1. Do a Cahs Flow Liquidity Analysis.
Analyze Trends in cash flow from operations from the indirect cash flow statement, Changes in the cash balance, Changes in the days cash conversion cycle, Changes in inventory days, Accounts receivables days, & Accounts payable days - to - analyze the reasons for any changes in the cash conversion cycle.
2. Calculate the growth rate for revenues over the 2 years and the sustainable growth rate, and compare them.
3. Discuss what these trends reveal about the firm's liquidity from a cash flow perspective.
Income Statement (in thousands) 2017 2016 Total Revenue 543,660 282,354 Cost of Revenue 448,467 246,109 Gross Profit 95,193 36,245 Selling & Administrative Exp. 41,515 37,652 Depreciaiton Expense 66,221 64,343 Total Operating Expense 107,736 101,995 Operating Income or Loss (12,543) (65,750) Interest & other expenses 60,126 31,447 Earnings before Tax (72,669) (97,197) Tax (4,987) (26,286) Net Income (67,682) (70,911) Dividends Paid - 2,438 Addition to Ret. Earnings (67,682) (73,349)Explanation / Answer
Cash flow Net profit/Loss during the year -72,669 (+) Depreciation 66,221 (+) Interest exp 60,126 53,678 Changes in Current assets Increase in Net accounts receivables -37,568 Increase in Inventory -7,061 Decrease in Other current asset 1,545 Changes in Current Liabilities Increase in Net accounts Payable 10,820 Decrease in Short term debt -3,025 Increase in Other current liabilities 2,851 Cash generated from operations 21,240 (-) Taxes paid -4,987 Net Cash generated from operations 16,253 Investing Activity Purchase of net property & plant & equipments -52,050 (2,59,039+66,221(Depreci)-2,73,210) Sale of Intangible assets 44,129 (2,01,430-1,57,301) Purchase of Other assets -4,542 (15,282-10,740) -12,463 3,790 Finance activty Decrease in Long term debt -7,053 Increase in shares 66,854 interest exp -60,126 -325 3,465