Week 4 (your nursing study bay) DiscussionCOLLAPSE<\/p>\n
Cash Flow Statement Analyis<\/p>\n
This week we turn to the last of the major financial statements \u2013 the Cash Flow Statement.<\/p>\n
Locate and post a screen shot of an actual Cash Flow Statement from the latest fiscal year for one of the following companies:
\nMedtronics
\nExxonMobil
\nYour own Company (or any company you choose)
\nPick a Cash Flow Statement line item or ratio from the following list:
\nLine ItemRatio
\nNet Change in Cash
\nCash Flow from Operations
\nCash Flow from Investing
\nCash Flow from Financing
\nCapital Expenditures
\nDividends Paid
\nProceeds from Long Term Debt<\/p>\n
Cash Flow Return on Assets
\nDividend Payout Ratio
\nCap Ex to Depreciation Ratio
\nFree Cash Flow
\nWhat does this line item or ratio measure and why is it important for Management to understand this number
\nFrom the Cash Flow Statement, identify the past 4 years of amounts for your line item or ratio. Share this data with the class using a data table or chart.
\nAnswer the following questions:
\nWhat is the trend for this line item or ratio?
\nHas the line item or ratio amount increased or decreased?
\nIs this a \u201cgood” or a \u201cbad\u201d thing for this company?
\nWhat might management do to improve this line item or ratio?
\nPost your initial response by Wednesday, midnight of your time zone, and reply to at least 2 of your classmates’ initial posts by Sunday, midnight of your time zone.\u200b<\/p>\n
First person to respond to is Gabriela<\/p>\n
Greetings Prof. Armstrong & Classmates,<\/p>\n
Medtronic \u2013 Ratio: Free Cash Flow (FCF)<\/p>\n
I picked the Free Cash Flow ratio as it is new to my knowledge, and in comparison, with the net cash flow, the free cash flow is more specific, which shows how much cash a company generates through its operating activities, after taking into account operating expenses and capital expenditures. Investors use this metric to analyze the financial health of a company. The higher the free cash flow is, the healthier a company is. In contrast, an insufficient FCF can force companies to increase their debt levels and is a sign that companies cannot sustain earnings growth. (Investopedia, 1). It is the metric to analyze the investment that will generate a good return on capital.<\/p>\n
In millions<\/p>\n
2021<\/p>\n
2020<\/p>\n
2019<\/p>\n
2018<\/p>\n
Net Cash from Operating Activities<\/p>\n
6,240<\/p>\n
7,234<\/p>\n
7,007<\/p>\n
4,684<\/p>\n
Additions to PPE<\/p>\n
(1,355)<\/p>\n
(1,213)<\/p>\n
(1,134)<\/p>\n
(1,068)<\/p>\n
Free Cash Flow<\/p>\n
4,885<\/p>\n
6,021<\/p>\n
5,873<\/p>\n
3,616<\/p>\n
As a trend Medtronic FCF has a steady growth compared with the industry, for example, Merck which is considered one of the leading players in the healthcare industry (2):<\/p>\n
Merck<\/p>\n
09-2021<\/p>\n
2020<\/p>\n
2019<\/p>\n
2018<\/p>\n
Free Cash Flow<\/p>\n
4,787<\/p>\n
5,569<\/p>\n
9,967<\/p>\n
8,307<\/p>\n
These large amounts of FCF can be used to pay dividends, boost investments in operations or reduce debt, which Medtronic can dispose of. The level of revenues is relatively steady; however, the debt levels went up by 20% in 2021; the FCF accumulated could be used to pay this debt partially. As well, the levels of inventory and accounts receivables are high, and it costs cash, so these could generate the cash that could increase the FCF levels.<\/p>\n
Thank you. Gabriela<\/p>\n
References:<\/p>\n
Investopedia. Retrieved from: https:\/\/www.investopedia.com
\nMerck. Retrieved from: https:\/\/www.macrotrends.net\/stocks\/charts\/MRK\/merck\/free-cash-flow
\n2nd response to is Phi<\/p>\n
Greetings Prof. Armstrong & Classmates,<\/p>\n
Medtronic \u2013 Ratio: Free Cash Flow (FCF)<\/p>\n
I picked the Free Cash Flow ratio as it is new to my knowledge, and in comparison, with the net cash flow, the free cash flow is more specific, which shows how much cash a company generates through its operating activities, after taking into account operating expenses and capital expenditures. Investors use this metric to analyze the financial health of a company. The higher the free cash flow is, the healthier a company is. In contrast, an insufficient FCF can force companies to increase their debt levels and is a sign that companies cannot sustain earnings growth. (Investopedia, 1). It is the metric to analyze the investment that will generate a good return on capital.<\/p>\n
In millions<\/p>\n
2021<\/p>\n
2020<\/p>\n
2019<\/p>\n
2018<\/p>\n
Net Cash from Operating Activities<\/p>\n
6,240<\/p>\n
7,234<\/p>\n
7,007<\/p>\n
4,684<\/p>\n
Additions to PPE<\/p>\n
(1,355)<\/p>\n
(1,213)<\/p>\n
(1,134)<\/p>\n
(1,068)<\/p>\n
Free Cash Flow<\/p>\n
4,885<\/p>\n
6,021<\/p>\n
5,873<\/p>\n
3,616<\/p>\n
As a trend Medtronic FCF has a steady growth compared with the industry, for example, Merck which is considered one of the leading players in the healthcare industry (2):<\/p>\n
Merck<\/p>\n
09-2021<\/p>\n
2020<\/p>\n
2019<\/p>\n
2018<\/p>\n
Free Cash Flow<\/p>\n
4,787<\/p>\n
5,569<\/p>\n
9,967<\/p>\n
8,307<\/p>\n
These large amounts of FCF can be used to pay dividends, boost investments in operations or reduce debt, which Medtronic can dispose of. The level of revenues is relatively steady; however, the debt levels went up by 20% in 2021; the FCF accumulated could be used to pay this debt partially. As well, the levels of inventory and accounts receivables are high, and it costs cash, so these could generate the cash that could increase the FCF levels.<\/p>\n
Thank you. Gabriela<\/p>\n
References:<\/p>\n
Investopedia. Retrieved from: https:\/\/www.investopedia.com
\nMerck. Retrieved from: https:\/\/www.macrotrends.net\/stocks\/charts\/MRK\/merck\/free-cash-flow<\/p>\n
—<\/p>\n
Discussion in Week 4 (your nursing study bay) COLLAPSE<\/p>\n
Analyze the Cash Flow Statement<\/p>\n
This week, we’ll look at the Cash Flow Statement, the last of the major financial statements.<\/p>\n
Find and submit a screen photo of a real Cash Flow Statement from one of the following companies from the most recent fiscal year:<\/p>\n
Medtronics<\/p>\n
ExxonMobil<\/p>\n
Owning a Business (or any company you choose)<\/p>\n
Choose one of the following line items or ratios from the Cash Flow Statement:<\/p>\n
Line ItemRatio is a ratio of the number of items in a line.<\/p>\n
Cash Flow Change<\/p>\n
Flow of Cash from Operations<\/p>\n
Investing Cash Flow is a term that is used to describe the amount of money that is<\/p>\n
Cash Flow from Financing (Cash Flow from Financing)<\/p>\n
Expenditures on capital goods<\/p>\n
Dividends received<\/p>\n
Long-Term Debt Repayments<\/p>\n
Return on Assets (Cash Flow)<\/p>\n
Ratio of Dividends Paid Out<\/p>\n
Ratio of Capital Expenditure to Depreciation<\/p>\n
Flow of Cash<\/p>\n
What does this line item or ratio represent, and why does it matter?<\/p>\n
Discussion in Week 4 (your nursing study bay) COLLAPSE<\/p>\n
Analyze the Cash Flow Statement<\/p>\n
This week, we’ll look at the Cash Flow Statement, the last of the major financial statements.<\/p>\n
Find and submit a screen photo of a real Cash Flow Statement from one of the following companies from the most recent fiscal year:<\/p>\n
Medtronics<\/p>\n
ExxonMobil<\/p>\n
Owning a Business (or any company you choose)<\/p>\n
Choose one of the following line items or ratios from the Cash Flow Statement:<\/p>\n
Line ItemRatio is a ratio of the number of items in a line.<\/p>\n
Cash Flow Change<\/p>\n
Flow of Cash from Operations<\/p>\n
Investing Cash Flow is a term that is used to describe the amount of money that is<\/p>\n
Cash Flow from Financing (Cash Flow from Financing)<\/p>\n
Expenditures on capital goods<\/p>\n
Dividends received<\/p>\n
Long-Term Debt Repayments<\/p>\n
Return on Assets (Cash Flow)<\/p>\n
Ratio of Dividends Paid Out<\/p>\n
Ratio of Capital Expenditure to Depreciation<\/p>\n
Flow of Cash<\/p>\n
What does this line item or ratio represent, and why does it matter?<\/p>\n","protected":false},"excerpt":{"rendered":"
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