You are a financial accountant for a startup ride-sharing company. Like many startup technology companies, cash will be sourced from fi nancing activities. To benchmark against other competitors in the industry you compare the cash flow between Uber and Lyft for 2017 to 2020.The financial data is sourced afrom the Reuters website which is publicly available. You create a dashboard to present your findings to your CFO.
Click here to view the data visualisation
Your dashboard shows the following charts:
1. Cash Flow vs Net Income – This dual axis chart shows the cash flows from financing, investing and operating activities as a
stacked bar chart, and net income as a line chart. Both companies are shown for years 2017 to 2020.
2. Cash Flow from Operating Activities vs Operating Income – This dual axis chart shows the cash flow from operating activities as
a bar chart, and operating income as a line chart. Both companies are shown for years 2017 to 2020.
3. Quick Ratio – This line chart shows the quick ratio trend for each company.
4. Quick Ratio Components – This line chart shows the quick ratio components (cash and equivalents. short-term investments, and
current liabilities) for each company by year.
(a)
Based on the Cosh Flow vs Net Income visualization, what trends are shown?
❑ Uber’s cash flow from investing activities is decreasing. ❑ Uber’s cash flow from operations activities is decreasing. ❑ Lyft’s cash flow from operations activities is increasing. ❑ Lyft’s cash flow from fina ncing activities is increasing.
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Based on the Cosh Flow vs Net Income visualization, what conclusions can be made?
❑ Lyft required more cash compared to Uber in the last 4 years. ❑ Only Uber had a positive cash flow in the last 4 years.❑ Lyft issued more common stock in 2018 compared to 2017.
❑ Lyft had sales of fixed assets. sold investment instruments, or had collection of loans or insurance proceeds in 2020.
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Based on the Cosh Pow from OperatingActivities vs Operating Income visualization, what data relationship can be concluded between cash flow f rom operating activities and operating income?
O Far Lyft, there is an inverse relationship between cash flow from operating activities and operating income. For Uber, there is a direct relationship between cash flow from operating activities and operating income.
O Far Lyft, there is a direct relationship between cash flow f rom operating activities and operating income. For Uber, there is no clear relationship between cash flow from operating activities and operating income.
O Far Lyft, there is a direct relationship between cash flow f ram operating activities and operating income. For U ber, there is an inverse relationship between cash flow from operating activities and operating income.
❑ For both companies, there is no clear data relationship between cash flow from operating activities and operating income.
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.(d)
Based on the Quick Ratio visualization, what conclusion can be made?
❑ Lyft’s quick ratio is decreasing which could indicate that they may need to obtain additional financing in the future to payoff its immediate debts.
❑ Lyft’s quick ratio is decreasing but because the ratio is greater than 1, there is no reason to be concerned. ❑ Uber’s quick ratio is steadily increasing and the drop in 2020 should be considered an anomaly.❑ Lyft and Uber’s quick ratios are similar, which make sense since they are in the same industry.
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(e)
Using the Quick Ratio Component visualization, compare the difference between Lyft and Uber.
❑ Uber has a greater weighting on short term investments compared to cash and equivalents, whereas, Lyft has a greater weighting on cash and equivalents compared to short term investments.
❑ Uber’s current liabilities are decreasing whereas, Lyft’s current liabilities are increasing. ❑ U ber’s current liabilities are increasing whereas, Lyft’s current liabilities are decreasing.
❑ Lyft has a greater weighting on short term investments compared to cash and equivalents, whereas. Uber has a greater weighting on cash and equivalents compared to short term investments.
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