ADM 1340 Lecture Notes - Lecture 25: Cash Flow Statement, Cash Flow, Balance Sheet
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1 Apr 2019
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We are continuing chapter 13 from last week. The next class is exercise preparation for the final exam: cash flow from financing activity. We need to use income-statement and long-term liabilities and shareholder"s equity within the balance sheet. There are a few temporary accounts in this case. Net income in the income statement (profit earned from the company). If shareholders do not get income, they go to returned earnings. A change gives you a hint as to what changed in this specific year. If you borrow money you need to keep track of what you borrowed whether this is short- term or long-term. Common shares from the following: insurance, retirement, dividends, long-term and short- term retirement and insurance. (more details on slide 57) Balance sheet is used to determine our financing activity. Based on the sheet on slide 58, it is divided through asset and liabilities.
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What are the Balance Sheet Ratios (debt-to-asset and debt-to-equity ratios) for the following financial information for 2015 and 2016? (PLEASE SHOW WORK SO I CAN UNDERSTAND HOW THIS WAS DONE. Thank you)
| AMAZON.COM INC (AMZN) CashFlowFlag INCOME STATEMENT | ||
| Fiscal year ends in December. USD in millions except per share data. | 2015-12 | 2016-12 |
| Revenue | 107006 | 135987 |
| Cost of revenue | 71651 | 88265 |
| Gross profit | 35355 | 47722 |
| Operating expenses | ||
| Sales, General and administrative | 20411 | 27284 |
| Other operating expenses | 12711 | 16252 |
| Total operating expenses | 33122 | 43536 |
| Operating income | 2233 | 4186 |
| Interest Expense | 459 | 484 |
| Other income (expense) | -206 | 190 |
| Income before income taxes | 1568 | 3892 |
| Provision for income taxes | 950 | 1425 |
| Other income | -22 | -96 |
| Net income from continuing operations | 596 | 2371 |
| Net income | 596 | 2371 |
| Net income available to common shareholders | 596 | 2371 |
| Earnings per share | ||
| Basic | 1.28 | 5.01 |
| Diluted | 1.25 | 4.9 |
| Weighted average shares outstanding | ||
| Basic | 467 | 474 |
| Diluted | 477 | 484 |
| EBITDA | 8308 | 12492 |
| AMAZON.COM INC (AMZN) CashFlowFlag BALANCE SHEET | ||
| Fiscal year ends in December. USD in millions except per share data. | 2015-12 | 2016-12 |
| Assets | ||
| Current assets | ||
| Cash | ||
| Cash and cash equivalents | 15890 | 19334 |
| Short-term investments | 3918 | 6647 |
| Total cash | 19808 | 25981 |
| Receivables | 6423 | 8339 |
| Inventories | 10243 | 11461 |
| Deferred income taxes | ||
| Total current assets | 36474 | 45781 |
| Non-current assets | ||
| Property, plant and equipment | ||
| Land | 9770 | 13998 |
| Fixtures and equipment | 18417 | 25989 |
| Other properties | 1866 | 2454 |
| Property and equipment, at cost | 30053 | 42441 |
| Accumulated Depreciation | -8215 | -13327 |
| Property, plant and equipment, net | 21838 | 29114 |
| Goodwill | 3759 | 3784 |
| Intangible assets | ||
| Deferred income taxes | 1084 | |
| Other long-term assets | 2289 | 4723 |
| Total non-current assets | 28970 | 37621 |
| Total assets | 65444 | 83402 |
| Liabilities and stockholders' equity | ||
| Liabilities | ||
| Current liabilities | ||
| Accounts payable | 20397 | 25309 |
| Accrued liabilities | 10384 | 13739 |
| Deferred revenues | 3118 | 4768 |
| Total current liabilities | 33899 | 43816 |
| Non-current liabilities | ||
| Long-term debt | 8235 | 7694 |
| Capital leases | 5948 | 7519 |
| Deferred taxes liabilities | 392 | |
| Other long-term liabilities | 3978 | 4696 |
| Total non-current liabilities | 18161 | 20301 |
| Total liabilities | 52060 | 64117 |
| Stockholders' equity | ||
| Common stock | 5 | 5 |
| Additional paid-in capital | 13394 | 17186 |
| Retained earnings | 2545 | 4916 |
| Treasury stock | -1837 | -1837 |
| Accumulated other comprehensive income | -723 | -985 |
| Total stockholders' equity | 13384 | 19285 |
| Total liabilities and stockholders' equity | 65444 | 83402 |
| AMAZON.COM INC (AMZN) Statement of CASH FLOW | ||
| Fiscal year ends in December. USD in millions except per share data. | 2015-12 | 2016-12 |
| Cash Flows From Operating Activities | ||
| Net income | 596 | 2371 |
| Depreciation & amortization | 6281 | 8116 |
| Investments losses (gains) | 5 | |
| Deferred income taxes | 81 | -246 |
| Stock based compensation | 2119 | 2975 |
| Accounts receivable | -1755 | -3367 |
| Inventory | -2187 | -1426 |
| Accounts payable | 4294 | 5030 |
| Accrued liabilities | 913 | 1724 |
| Other working capital | 1292 | 1955 |
| Other non-cash items | 281 | -689 |
| Net cash provided by operating activities | 11920 | 16443 |
| Cash Flows From Investing Activities | ||
| Investments in property, plant, and equipment | -4589 | -6737 |
| Acquisitions, net | -795 | -116 |
| Purchases of investments | -4091 | -7756 |
| Sales/Maturities of investments | 3025 | 4733 |
| Net cash used for investing activities | -6450 | -9876 |
| Cash Flows From Financing Activities | ||
| Long-term debt issued | 353 | 621 |
| Long-term debt repayment | -4235 | -4361 |
| Excess tax benefit from stock based compensation | 119 | 829 |
| Repurchases of treasury stock | ||
| Net cash provided by (used for) financing activities | -3763 | -2911 |
| Effect of exchange rate changes | -374 | -212 |
| Net change in cash | 1333 | 3444 |
| Cash at beginning of period | 14557 | 15890 |
| Cash at end of period | 15890 | 19334 |
| Free Cash Flow | ||
| Operating cash flow | 11920 | 16443 |
| Capital expenditure | -4589 | -6737 |
| Free cash flow | 7331 | 9706 |
| Supplemental schedule of cash flow data | ||
| Cash paid for income taxes | 273 | 412 |
| Cash paid for interest | 478 | 496 |
What are the Market Value Leverage Ratios (Value of Debt to Value of Equity, Value of Debt to Value of Assets)) for the following 2015 and 2016 financial data? (PLEASE SHOW WORK SO I CAN UNDERSTAND HOW THIS WAS DONE. Thank you)
| AMAZON.COM INC (AMZN) CashFlowFlag INCOME STATEMENT | ||
| Fiscal year ends in December. USD in millions except per share data. | 2015-12 | 2016-12 |
| Revenue | 107006 | 135987 |
| Cost of revenue | 71651 | 88265 |
| Gross profit | 35355 | 47722 |
| Operating expenses | ||
| Sales, General and administrative | 20411 | 27284 |
| Other operating expenses | 12711 | 16252 |
| Total operating expenses | 33122 | 43536 |
| Operating income | 2233 | 4186 |
| Interest Expense | 459 | 484 |
| Other income (expense) | -206 | 190 |
| Income before income taxes | 1568 | 3892 |
| Provision for income taxes | 950 | 1425 |
| Other income | -22 | -96 |
| Net income from continuing operations | 596 | 2371 |
| Net income | 596 | 2371 |
| Net income available to common shareholders | 596 | 2371 |
| Earnings per share | ||
| Basic | 1.28 | 5.01 |
| Diluted | 1.25 | 4.9 |
| Weighted average shares outstanding | ||
| Basic | 467 | 474 |
| Diluted | 477 | 484 |
| EBITDA | 8308 | 12492 |
| AMAZON.COM INC (AMZN) CashFlowFlag BALANCE SHEET | ||
| Fiscal year ends in December. USD in millions except per share data. | 2015-12 | 2016-12 |
| Assets | ||
| Current assets | ||
| Cash | ||
| Cash and cash equivalents | 15890 | 19334 |
| Short-term investments | 3918 | 6647 |
| Total cash | 19808 | 25981 |
| Receivables | 6423 | 8339 |
| Inventories | 10243 | 11461 |
| Deferred income taxes | ||
| Total current assets | 36474 | 45781 |
| Non-current assets | ||
| Property, plant and equipment | ||
| Land | 9770 | 13998 |
| Fixtures and equipment | 18417 | 25989 |
| Other properties | 1866 | 2454 |
| Property and equipment, at cost | 30053 | 42441 |
| Accumulated Depreciation | -8215 | -13327 |
| Property, plant and equipment, net | 21838 | 29114 |
| Goodwill | 3759 | 3784 |
| Intangible assets | ||
| Deferred income taxes | 1084 | |
| Other long-term assets | 2289 | 4723 |
| Total non-current assets | 28970 | 37621 |
| Total assets | 65444 | 83402 |
| Liabilities and stockholders' equity | ||
| Liabilities | ||
| Current liabilities | ||
| Accounts payable | 20397 | 25309 |
| Accrued liabilities | 10384 | 13739 |
| Deferred revenues | 3118 | 4768 |
| Total current liabilities | 33899 | 43816 |
| Non-current liabilities | ||
| Long-term debt | 8235 | 7694 |
| Capital leases | 5948 | 7519 |
| Deferred taxes liabilities | 392 | |
| Other long-term liabilities | 3978 | 4696 |
| Total non-current liabilities | 18161 | 20301 |
| Total liabilities | 52060 | 64117 |
| Stockholders' equity | ||
| Common stock | 5 | 5 |
| Additional paid-in capital | 13394 | 17186 |
| Retained earnings | 2545 | 4916 |
| Treasury stock | -1837 | -1837 |
| Accumulated other comprehensive income | -723 | -985 |
| Total stockholders' equity | 13384 | 19285 |
| Total liabilities and stockholders' equity | 65444 | 83402 |
| AMAZON.COM INC (AMZN) Statement of CASH FLOW | ||
| Fiscal year ends in December. USD in millions except per share data. | 2015-12 | 2016-12 |
| Cash Flows From Operating Activities | ||
| Net income | 596 | 2371 |
| Depreciation & amortization | 6281 | 8116 |
| Investments losses (gains) | 5 | |
| Deferred income taxes | 81 | -246 |
| Stock based compensation | 2119 | 2975 |
| Accounts receivable | -1755 | -3367 |
| Inventory | -2187 | -1426 |
| Accounts payable | 4294 | 5030 |
| Accrued liabilities | 913 | 1724 |
| Other working capital | 1292 | 1955 |
| Other non-cash items | 281 | -689 |
| Net cash provided by operating activities | 11920 | 16443 |
| Cash Flows From Investing Activities | ||
| Investments in property, plant, and equipment | -4589 | -6737 |
| Acquisitions, net | -795 | -116 |
| Purchases of investments | -4091 | -7756 |
| Sales/Maturities of investments | 3025 | 4733 |
| Net cash used for investing activities | -6450 | -9876 |
| Cash Flows From Financing Activities | ||
| Long-term debt issued | 353 | 621 |
| Long-term debt repayment | -4235 | -4361 |
| Excess tax benefit from stock based compensation | 119 | 829 |
| Repurchases of treasury stock | ||
| Net cash provided by (used for) financing activities | -3763 | -2911 |
| Effect of exchange rate changes | -374 | -212 |
| Net change in cash | 1333 | 3444 |
| Cash at beginning of period | 14557 | 15890 |
| Cash at end of period | 15890 | 19334 |
| Free Cash Flow | ||
| Operating cash flow | 11920 | 16443 |
| Capital expenditure | -4589 | -6737 |
| Free cash flow | 7331 | 9706 |
| Supplemental schedule of cash flow data | ||
| Cash paid for income taxes | 273 | 412 |
| Cash paid for interest | 478 | 496 |
What are the coverage ratios for the following data (using formula below) for 2015 and 2016? Please show how you came up with solution. Thank you Times interest earned = EBIT / Interest expense = ?? Times burden covered = EBIT / Interest + Principal repayment / 1 - tax rate = ??â (PLEASE SHOW WORK SO I CAN UNDERSTAND HOW THIS WAS DONE. Thank you
| AMAZON.COM INC (AMZN) CashFlowFlag INCOME STATEMENT | ||
| Fiscal year ends in December. USD in millions except per share data. | 2015-12 | 2016-12 |
| Revenue | 107006 | 135987 |
| Cost of revenue | 71651 | 88265 |
| Gross profit | 35355 | 47722 |
| Operating expenses | ||
| Sales, General and administrative | 20411 | 27284 |
| Other operating expenses | 12711 | 16252 |
| Total operating expenses | 33122 | 43536 |
| Operating income | 2233 | 4186 |
| Interest Expense | 459 | 484 |
| Other income (expense) | -206 | 190 |
| Income before income taxes | 1568 | 3892 |
| Provision for income taxes | 950 | 1425 |
| Other income | -22 | -96 |
| Net income from continuing operations | 596 | 2371 |
| Net income | 596 | 2371 |
| Net income available to common shareholders | 596 | 2371 |
| Earnings per share | ||
| Basic | 1.28 | 5.01 |
| Diluted | 1.25 | 4.9 |
| Weighted average shares outstanding | ||
| Basic | 467 | 474 |
| Diluted | 477 | 484 |
| EBITDA | 8308 | 12492 |
| AMAZON.COM INC (AMZN) CashFlowFlag BALANCE SHEET | ||
| Fiscal year ends in December. USD in millions except per share data. | 2015-12 | 2016-12 |
| Assets | ||
| Current assets | ||
| Cash | ||
| Cash and cash equivalents | 15890 | 19334 |
| Short-term investments | 3918 | 6647 |
| Total cash | 19808 | 25981 |
| Receivables | 6423 | 8339 |
| Inventories | 10243 | 11461 |
| Deferred income taxes | ||
| Total current assets | 36474 | 45781 |
| Non-current assets | ||
| Property, plant and equipment | ||
| Land | 9770 | 13998 |
| Fixtures and equipment | 18417 | 25989 |
| Other properties | 1866 | 2454 |
| Property and equipment, at cost | 30053 | 42441 |
| Accumulated Depreciation | -8215 | -13327 |
| Property, plant and equipment, net | 21838 | 29114 |
| Goodwill | 3759 | 3784 |
| Intangible assets | ||
| Deferred income taxes | 1084 | |
| Other long-term assets | 2289 | 4723 |
| Total non-current assets | 28970 | 37621 |
| Total assets | 65444 | 83402 |
| Liabilities and stockholders' equity | ||
| Liabilities | ||
| Current liabilities | ||
| Accounts payable | 20397 | 25309 |
| Accrued liabilities | 10384 | 13739 |
| Deferred revenues | 3118 | 4768 |
| Total current liabilities | 33899 | 43816 |
| Non-current liabilities | ||
| Long-term debt | 8235 | 7694 |
| Capital leases | 5948 | 7519 |
| Deferred taxes liabilities | 392 | |
| Other long-term liabilities | 3978 | 4696 |
| Total non-current liabilities | 18161 | 20301 |
| Total liabilities | 52060 | 64117 |
| Stockholders' equity | ||
| Common stock | 5 | 5 |
| Additional paid-in capital | 13394 | 17186 |
| Retained earnings | 2545 | 4916 |
| Treasury stock | -1837 | -1837 |
| Accumulated other comprehensive income | -723 | -985 |
| Total stockholders' equity | 13384 | 19285 |
| Total liabilities and stockholders' equity | 65444 | 83402 |
| AMAZON.COM INC (AMZN) Statement of CASH FLOW | ||
| Fiscal year ends in December. USD in millions except per share data. | 2015-12 | 2016-12 |
| Cash Flows From Operating Activities | ||
| Net income | 596 | 2371 |
| Depreciation & amortization | 6281 | 8116 |
| Investments losses (gains) | 5 | |
| Deferred income taxes | 81 | -246 |
| Stock based compensation | 2119 | 2975 |
| Accounts receivable | -1755 | -3367 |
| Inventory | -2187 | -1426 |
| Accounts payable | 4294 | 5030 |
| Accrued liabilities | 913 | 1724 |
| Other working capital | 1292 | 1955 |
| Other non-cash items | 281 | -689 |
| Net cash provided by operating activities | 11920 | 16443 |
| Cash Flows From Investing Activities | ||
| Investments in property, plant, and equipment | -4589 | -6737 |
| Acquisitions, net | -795 | -116 |
| Purchases of investments | -4091 | -7756 |
| Sales/Maturities of investments | 3025 | 4733 |
| Net cash used for investing activities | -6450 | -9876 |
| Cash Flows From Financing Activities | ||
| Long-term debt issued | 353 | 621 |
| Long-term debt repayment | -4235 | -4361 |
| Excess tax benefit from stock based compensation | 119 | 829 |
| Repurchases of treasury stock | ||
| Net cash provided by (used for) financing activities | -3763 | -2911 |
| Effect of exchange rate changes | -374 | -212 |
| Net change in cash | 1333 | 3444 |
| Cash at beginning of period | 14557 | 15890 |
| Cash at end of period | 15890 | 19334 |
| Free Cash Flow | ||
| Operating cash flow | 11920 | 16443 |
| Capital expenditure | -4589 | -6737 |
| Free cash flow | 7331 | 9706 |
| Supplemental schedule of cash flow data | ||
| Cash paid for income taxes | 273 | 412 |
| Cash paid for interest | 478 | 496 |
