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Please review the following real-world Hewlett Packard Statementof Cash flows and address the two questions below.

Cash flow from operating activities In millions In millions
For the year ended 2012 For the year ended 2011
Net (loss) earnings $(12,650) $7,074
Depreciation and amortization 5,095 4,984
Impairment of goodwill and purchasedintangible assets 18,035 885
Stock-based compensation expense 635 685
Provision for doubtful accounts 142 81
Provision for inventory 277 217
Restructuring charges 2,266 645
Deferred taxes on earnings (711) 166
Excess tax benefit from stock-basedcompetition (12) (163)
Other, net 265 (46)
Accounts and financing receivables 1,269 (227)
Inventory 890 (1,252)
Accounts payable (1,414) 275
Taxes on earnings (320) 610
Restructuring (840) (1,002)
Other assets and liabilities (2,356) (293)
Net cash provided by operatingactivities 10,571 12,639
Cash flows from investing activities:
Investment in property, plant, andequipment (3,706) (4,539)
Proceeds from sale of property, plant, andequipment 617 999
Purchases of available-for-sale securitiesand other investments (972) (96)
Maturities and sales of available-for-salesecurities and other investment 662 68
Payments in connection with businessacquisitions, net of cash acquired (141) (10,480)
Proceeds from business divestiture,net 87 89
Net cash used in investingactivities (3,453) (13,959)
Cash flow from financing activities:
(Payments) issuance of commercial paperand notes payable, net (2,775) (1,270)
Issuance of debt 5,154 11,942
Payment of debt (4,333) (2,336)
Issuance of common stock under employeestock plans 716 896
Repurchase of common stock (1,619) (10,117)
Excess tax benefit from stock-basedcompensation 12 163
Cash dividends paid (1,015) (844)
Net cash used in financingactivities (3,860) (1,566)
Increase (decrease) in cash and cashequivalents 3,258 (2,886)
Cash and cash equivalents at beginning ofperiod 8,043 10,929
Cash and cash equivalents at end ofperiod $11,301 $8,043

Required: : Please calculate the percentage increase or decreasein cash for the total line of the operating, investing, andfinancing sections bolded above and explain the major reasons forthe increase or decrease for each of these sections.

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Keith Leannon
Keith LeannonLv2
28 Sep 2019

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Please calculate the free cash flow for 2012 and explain themeaning of this ratio

Cash flow from operating activities In millions In millions
For the year ended 2012 For the year ended 2011
Net (loss) earnings $(12,650) $7,074
Depreciation and amortization 5,095 4,984
Impairment of goodwill and purchasedintangible assets 18,035 885
Stock-based compensation expense 635 685
Provision for doubtful accounts 142 81
Provision for inventory 277 217
Restructuring charges 2,266 645
Deferred taxes on earnings (711) 166
Excess tax benefit from stock-basedcompetition (12) (163)
Other, net 265 (46)
Accounts and financing receivables 1,269 (227)
Inventory 890 (1,252)
Accounts payable (1,414) 275
Taxes on earnings (320) 610
Restructuring (840) (1,002)
Other assets and liabilities (2,356) (293)
Net cash provided by operatingactivities 10,571 12,639
Cash flows from investing activities:
Investment in property, plant, andequipment (3,706) (4,539)
Proceeds from sale of property, plant, andequipment 617 999
Purchases of available-for-sale securitiesand other investments (972) (96)
Maturities and sales of available-for-salesecurities and other investment 662 68
Payments in connection with businessacquisitions, net of cash acquired (141) (10,480)
Proceeds from business divestiture,net 87 89
Net cash used in investingactivities (3,453) (13,959)
Cash flow from financing activities:
(Payments) issuance of commercial paperand notes payable, net (2,775) (1,270)
Issuance of debt 5,154 11,942
Payment of debt (4,333) (2,336)
Issuance of common stock under employeestock plans 716 896
Repurchase of common stock (1,619) (10,117)
Excess tax benefit from stock-basedcompensation 12 163
Cash dividends paid (1,015) (844)
Net cash used in financingactivities (3,860) (1,566)
Increase (decrease) in cash and cashequivalents 3,258 (2,886)
Cash and cash equivalents at beginning ofperiod 8,043 10,929
Cash and cash equivalents at end ofperiod $11,301 $8,043

read below to answer question

QUESTION:

6. How much cash does HP have on hand at October 31, 2014? Isthis amount the same as,

greater than, or smaller than the amount they had the yearbefore (i.e., on October 31, 2013)?

What are HP’s major sources and uses of cash in 2014?

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES

Consolidated Statements of Earnings

For the fiscal years ended October 31

2014-2013 -2012

In millions, except per share amounts

Net revenue:

Products ........................................... $ 73,726 $72,398 $ 77,887

Services ............................................ 37,32739,453 42,008

Financing income . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 401 447 462

Total net revenue ................................... 111,454112,298 120,357

Costs and expenses:

Cost of products ..................................... 56,46955,632 59,468

Cost of services ...................................... 28,09330,436 32,600

Financing interest . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 277 312 317

Research and development .............................. 3,4473,135 3,399

Selling, general and administrative ........................13,353 13,267 13,500

Amortization of intangible assets .........................1,000 1,373 1,784

Impairment of goodwill and intangible assets ................. —— 18,035

Restructuring charges .................................. 1,619990 2,266

Acquisition-related charges . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 11 22 45

Total operating expenses .............................. 104,269105,167 131,414

Earnings (loss) from operations ............................7,185 7,131 (11,057)

Interest and other, net ...................................(628) (621) (876)

Earnings (loss) before taxes ...............................6,557 6,510 (11,933)

Provision for taxes ......................................(1,544) (1,397) (717)

Net earnings (loss) ..................................... $5,013 $ 5,113 $(12,650)

Net earnings (loss) per share:

Basic .............................................. $ 2.66 $2.64 $ (6.41)

Diluted ............................................ $ 2.62 $2.62 $ (6.41)

Weighted-average shares used to compute net earnings (loss)per

share:

Basic .............................................. 1,882 1,9341,974

Diluted ............................................ 1,912 1,9501,974

The accompanying notes are an integral part of theseConsolidated Financial Statements.

84

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES

Consolidated Balance Sheets

As of October 31

2014 2013

In millions, except

par value

ASSETS

Current assets:

Cash and cash equivalents....................................... $ 15,133 $ 12,163

Accounts receivable ...........................................13,832 15,876

Financing receivables ..........................................2,946 3,144

Inventory ...................................................6,415 6,046

Other current assets ...........................................11,819 13,135

Total current assets ..........................................50,145 50,364

Property, plant and equipment..................................... 11,340 11,463

Long-term financing receivables and other assets........................ 8,454 9,556

Goodwill .....................................................31,139 31,124

Intangible assets............................................... 2,128 3,169

Total assets ...................................................$103,206 $105,676

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Notes payable and short-termborrowings............................ $ 3,486 $ 5,979

Accounts payable .............................................15,903 14,019

Employee compensation and benefits.............................. 4,209 4,436

Taxes on earnings .............................................1,017 1,203

Deferred revenue .............................................6,143 6,477

Accrued restructuring . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 898 901

Other accrued liabilities........................................ 12,079 12,506

Total current liabilities........................................ 43,735 45,521

Long-term debt ................................................16,039 16,608

Other liabilities................................................ 16,305 15,891

Commitments and contingencies

Stockholders’ equity:

HP stockholders’ equity

Preferred stock, $0.01 par value (300 shares authorized; noneissued) ....... — —

Common stock, $0.01 par value (9,600 shares authorized; 1,839and 1,908

shares issued and outstanding at October 31, 2014 and October31, 2013,

respectively) . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . 18 19

Additional paid-in capital....................................... 3,430 5,465

Retained earnings.............................................29,164 25,563

Accumulated other comprehensive loss............................. (5,881) (3,778)

Total HP stockholders’ equity ..................................26,731 27,269

Non-controlling interests . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . 396 387

Total stockholders’ equity......................................... 27,127 27,656

Total liabilities and stockholders’ equity............................... $103,206 $105,676

The accompanying notes are an integral part of theseConsolidated Financial Statements.

86

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the fiscal years ended October 31

2014 2013 2012

In millions

Cash flows from operating activities:

Net earnings (loss) ........................................ $5,013 $ 5,113 $(12,650)

Adjustments to reconcile net earnings (loss) to net cashprovided by operating

activities:

Depreciation and amortization .............................4,334 4,611 5,095

Impairment of goodwill and intangible assets.................... — — 18,035

Stock-based compensation expense . . . . . . . . . . . . . . . .. . . . . . . . . . 560 500 635

Provision for doubtful accounts . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 55 61 142

Provision for inventory . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 211 275 277

Restructuring charges ................................... 1,619990 2,266

Deferred taxes on earnings . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . (34) (410) (711)

Excess tax benefit from stock-based compensation . . . . . . . .. . . . . . . . (58) (2) (12)

Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 81 443 265

Changes in operating assets and liabilities (net ofacquisitions):

Accounts receivable ................................... 2,017530 1,687

Financing receivables . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 420 484 (418)

Inventory ......................................... (580) (4)890

Accounts payable .................................... 1,912 541(1,414)

Taxes on earnings . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 310 417 (320)

Restructuring ....................................... (1,506)(904) (840)

Other assets and liabilities ..............................(2,021) (1,037) (2,356)

Net cash provided by operating activities ...................12,333 11,608 10,571

Cash flows from investing activities:

Investment in property, plant and equipment....................... (3,853) (3,199) (3,706)

Proceeds from sale of property, plant and equipment . . . . . .. . . . . . . . . . . 843 653 617

Purchases of available-for-sale securities and other investments........... (1,086) (1,243) (972)

Maturities and sales of available-for-sale securities and otherinvestments .... 1,347 1,153 662

Payments made in connection with business acquisitions, net ofcash acquired . (49) (167) (141)

Proceeds from business divestiture, net . . . . . . . . . . . .. . . . . . . . . . . . . . . 6 — 87

Net cash used in investing activities .......................(2,792) (2,803) (3,453)

Cash flows from financing activities:

Short-term borrowings with original maturities less than 90days, net . . . . . . . 148 (154) (2,775)

Issuance of debt ......................................... 2,875279 5,154

Payment of debt .........................................(6,037) (5,721) (4,333)

Issuance of common stock under employee stock plans . . . . . .. . . . . . . . . . 297 288 716

Repurchase of common stock .................................(2,728) (1,532) (1,619)

Excess tax benefit from stock-based compensation . . . . . . . .. . . . . . . . . . . 58 2 12

Cash dividends paid .......................................(1,184) (1,105) (1,015)

Net cash used in financing activities .......................(6,571) (7,943) (3,860)

Increase in cash and cash equivalents............................. 2,970 862 3,258

Cash and cash equivalents at beginning of period..................... 12,163 11,301 8,043

Cash and cash equivalents at end of period......................... $15,133 $12,163 $ 11,301

Supplemental cash flow disclosures:

Income taxes paid (net of refunds) ............................$ 1,267 $ 1,391 $ 1,750

Interest expense paid . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 678 837 856

Supplemental schedule of non-cash investing and financingactivities:

Purchase of assets under capital leases . . . . . . . . . . . .. . . . . . . . . . . . . $ 113 $ 3 $ 12

The accompanying notes are an integral part of theseConsolidated Financial Statements.

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