Using the table below, explain the difference between net income and cash flow from operating activities for Techno in 2009 and analyze their cash flows for 2008 and 2009.
(in thousands)
2009
2008
Net income
$ 316,354
$ 242,329
Noncash charges (credits) to income
Depreciation and amortization
68,156
62,591
Deferred taxes
15,394
22,814
$ 399,904
$ 327,734
Cash Provided (Used) by Operating Assets and Liabilities:
Receivables
(288,174)
(49,704)
Inventories
(159,419)
(145,554)
Other current assets
(1,470)
3,832
Accounts payable, accrued liabilities
73,684
41,079
Total Cash Provided by Operations
$ 24,525
$ 177,387
Investment activities
Additions to plant and equipment
(94,1760)
(93,136)
Other investment activities
14,408
(34,771)
Net investment activities
($ 79,768)
($ 127,907)
Financing activities
Purchases of treasury stock
(45,854)
(39,267)
Dividends paid
(49,290)
(22,523)
Net changes in short-term borrowing
125,248
45,067
Additions to long-term borrowings
135,249
4,610
Repayments of long-term borrowings
(250,564)
Net financing activities
$ 165,353
($ 262,677)
Increase (decrease) in cash
$ 110,110
($ 213,197)
Beginning cash balance
78,114
291,311
Ending cash balance
$ 188,224
$ 78,114
Using the table below, explain the difference between net income and cash flow from operating activities for Techno in 2009 and analyze their cash flows for 2008 and 2009.
| (in thousands) | 2009 | 2008 |
| Net income | $ 316,354 | $ 242,329 |
| Noncash charges (credits) to income | ||
| Depreciation and amortization | 68,156 | 62,591 |
| Deferred taxes | 15,394 | 22,814 |
| $ 399,904 | $ 327,734 | |
| Cash Provided (Used) by Operating Assets and Liabilities: | ||
| Receivables | (288,174) | (49,704) |
| Inventories | (159,419) | (145,554) |
| Other current assets | (1,470) | 3,832 |
| Accounts payable, accrued liabilities | 73,684 | 41,079 |
| Total Cash Provided by Operations | $ 24,525 | $ 177,387 |
| Investment activities | ||
| Additions to plant and equipment | (94,1760) | (93,136) |
| Other investment activities | 14,408 | (34,771) |
| Net investment activities | ($ 79,768) | ($ 127,907) |
| Financing activities | ||
| Purchases of treasury stock | (45,854) | (39,267) |
| Dividends paid | (49,290) | (22,523) |
| Net changes in short-term borrowing | 125,248 | 45,067 |
| Additions to long-term borrowings | 135,249 | 4,610 |
| Repayments of long-term borrowings | (250,564) | |
| Net financing activities | $ 165,353 | ($ 262,677) |
| Increase (decrease) in cash | $ 110,110 | ($ 213,197) |
| Beginning cash balance | 78,114 | 291,311 |
| Ending cash balance | $ 188,224 | $ 78,114 |
Related questions
What are the coverage ratios for the following data (using formula below)? 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 = ??
| MICROSOFT CORP BALANCE SHEET | ||
| 2014 | 2015 | |
| Assets | ||
| Cash | ||
| Cash and cash equivalents | $8,669 | $5,595 |
| Short-term investments | $77,040 | $90,931 |
| Total cash | $85,709 | $96,526 |
| Receivables | $19,544 | $17,908 |
| Inventories | $2,660 | $2,902 |
| Deferred income taxes | $1,941 | $1,915 |
| Other current assets | $4,392 | $5,461 |
| Total current assets | $114,246 | $124,712 |
| Non-current assets | ||
| Gross property, plant and equipment | $27,804 | $32,337 |
| Accumulated Depreciation | -$14,793 | -$17,606 |
| Net property, plant and equipment | $13,011 | $14,731 |
| Equity and other investments | $14,597 | $12,053 |
| Goodwill | $20,127 | $16,939 |
| Intangible assets | $6,981 | $4,835 |
| Other long-term assets | $3,422 | $2,953 |
| Total non-current assets | $58,138 | $51,511 |
| Total assets | $172,384 | $176,223 |
| Liabilities and stockholders' equity | ||
| Liabilities | ||
| Current liabilities | ||
| Short-term debt | $2,000 | $7,484 |
| Accounts payable | $7,432 | $6,591 |
| Taxes payable | $782 | $606 |
| Accrued liabilities | $4,797 | $5,096 |
| Deferred revenues | $23,150 | $23,223 |
| Other current liabilities | $7,464 | $6,858 |
| Total current liabilities | $45,625 | $49,858 |
| Non-current liabilities | ||
| Long-term debt | $20,645 | $27,808 |
| Deferred taxes liabilities | $2,728 | $2,835 |
| Deferred revenues | $2,008 | $2,095 |
| Other long-term liabilities | $11,594 | $13,544 |
| Total non-current liabilities | $36,975 | $46,282 |
| Total liabilities | $82,600 | $96,140 |
| Stockholders' equity | ||
| Common stock | $68,366 | $68,465 |
| Retained earnings | $17,710 | $9,096 |
| Accumulated other comprehensive income | $3,708 | $2,522 |
| Total stockholders' equity | $89,784 | $80,083 |
| Total liabilities and stockholders' equity | $172,384 | $176,223 |
| MICROSOFT CORP INCOME STATEMENT | ||
| (USD in millions except per share data) | 2014 | 2015 |
| Revenue | $86,833 | $93,580 |
| Cost of revenue | $26,934 | $33,038 |
| Gross profit | $59,899 | $60,542 |
| Operating expenses | ||
| Research and development | $11,381 | $12,046 |
| Sales, General and administrative | $20,632 | $20,324 |
| Restructuring, merger and acquisition | $127 | $0 |
| Other operating expenses | $0 | $10,011 |
| Total operating expenses | $32,140 | $42,381 |
| Operating income | $27,759 | $18,161 |
| Interest Expense | $597 | $781 |
| Other income (expense) | $658 | $1,127 |
| Income before taxes | $27,820 | $18,507 |
| Provision for income taxes | $5,746 | $6,314 |
| Net income from continuing operations | $22,074 | $12,193 |
| Net income | $22,074 | $12,193 |
| Net income available to common shareholders | $22,074 | $12,193 |
| Earnings per share | ||
| Basic | $2.66 | $1.49 |
| Diluted | $2.63 | $1.48 |
| Weighted average shares outstanding | ||
| Basic | $8,299 | $8,177 |
| Diluted | $8,399 | $8,254 |
| EBITDA | $33,629 | $25,245 |
| MICROSOFT CORP CASH FLOW STATEMENT | ||
| (USD in millions except per share data) | 2014 | 2015 |
| Cash Flows From Operating Activities | ||
| Net income | $22,074 | $12,193 |
| Depreciation & amortization | $5,212 | $5,957 |
| Investment/asset impairment charges | $0 | $7,498 |
| Investments losses (gains) | -$109 | -$443 |
| Deferred income taxes | -$331 | $224 |
| Stock based compensation | $2,446 | $2,574 |
| Accounts receivable | -$1,120 | $1,456 |
| Inventory | -$161 | -$272 |
| Accounts payable | $473 | -$1,054 |
| Other working capital | $1,432 | $1,383 |
| Other non-cash items | $2,315 | -$436 |
| Net cash provided by operating activities | $32,231 | $29,080 |
| Cash Flows From Investing Activities | ||
| Investments in property, plant, and equipment | -$5,485 | -$5,944 |
| Acquisitions, net | -$5,937 | -$3,723 |
| Purchases of investments | -$72,690 | -$98,729 |
| Sales/Maturities of investments | $65,366 | $85,861 |
| Other investing activities | -$87 | -$466 |
| Net cash used for investing activities | -$18,833 | -$23,001 |
| Cash Flows From Financing Activities | ||
| Debt issued | $10,350 | $10,680 |
| Debt repayment | -$3,888 | -$1,500 |
| Common stock issued | $607 | $634 |
| Common stock repurchased | -$7,316 | -$14,443 |
| Excess tax benefit from stock based compensation | $271 | $588 |
| Dividend paid | -$8,879 | -$9,882 |
| Other financing activities | $461 | $4,843 |
| Net cash provided by (used for) financing activities | -$8,394 | -$9,080 |
| Effect of exchange rate changes | -$139 | -$73 |
| Net change in cash | $4,865 | -$3,074 |
| Cash at beginning of period | $3,804 | $8,669 |
| Cash at end of period | $8,669 | $5,595 |
| Free Cash Flow | ||
| Operating cash flow | $32,231 | $29,080 |
| Capital expenditure | -$5,485 | -$5,944 |
| Free cash flow | $26,746 | $23,136 |
