Cash Flow Statement Analysis
This week we turn to the last of the major financial statements – the Cash Flow Statement.
1. Locate and post a screenshot of an actual Cash Flow Statement from the company’s latest annual report (which can be found in the investor relations section of the website) for one of the following companies:
§ Disney
§ Verizon
§ Crowdstrike
2. Pick a Cash Flow Statement line item and a ratio from the following list:
|
Line Item |
Ratio |
|
§
§
§ Net Change in Cash § Cash Flow from Operations § Cash Flow from Investing § Cash Flow from Financing § Capital Expenditures § Dividends Paid § Proceeds from Long Term Debt |
§
§
§ Cash Flow Return on Assets § Dividend Payout Ratio § Cap Ex to Depreciation Ratio § Free Cash Flow |
3. What do these line item and ratio measure and why is it important for Management to understand these numbers?
4. From the Cash Flow Statement, identify the past 4 years of amounts for your line item and ratio. Share this data with the class using a data table or chart.
5. Answer the following questions:
§ What are the trends for the line item and ratio?
§ Have the line item and ratio amount increased or decreased?
§ Is this a “good” or a “bad” thing for this company?
§ What might management do to improve the line item and ratio?