FINS1613 Study Guide - Quiz Guide: Cash Flow Statement, Fiscal Year, Cash Flow
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The financial statement for urban outfitters for the fiscal year ending Jan 2012 can be found on google
CP12-2 | Finding Financial Information | LO12-2, 12-4, 12-6 | ||||
Refer to the financial statements of Urban Outfitters given in Appendix C at the end of this book. | ||||||
Required: | ||||||
1. Does Urban Outfitters use the direct or indirect method to report cash flows from operating activities? | ||||||
2. What amount of tax payments did the company make during the most recent reporting year? | ||||||
(Hint: The statement of cash flows may be helpful to answer this question.) | ||||||
3. Explain why the âshare-based compensationâ and âdepreciation and amortizationâ items were added in | ||||||
the reconciliation of net income to net cash provided by operating activities. | ||||||
4. Has the company paid cash dividends during the last three years? | ||||||
How do you know? | ||||||
5. What was free cash flow for the year ended January 31, 2012? (Dollars in thousands.) | ||||||
Cash Flows from | ||||||
Free Cash Flow: | ||||||
Tesford plc has estimated net cash flows from operations (after interest and taxation) for the next five years as follows:
Year | Cashflow |
1 | £ 3,000,000 |
2 | £ 12,000,000 |
3 | £ 5,000,000 |
4 | £ 6,000,000 |
5 | £ 5,000,000 |
The cash flows have been calculated before the deduction of additional investment in fixed capital and working capital.
This amounts to £2m in each of the first two years and £3m for each year thereafter. The firm currently has a cash balance of £500,000 which
it intends to maintain to cope with unexpected events. There are 24 million shares in issue. The directors are committed to shareholder wealth maximisation.
A. Calculate the annual cash flow available for dividend payments and the dividend per share is the residual dividend policy was strictly adhered to.
B. If the directors chose to have a smooth dividend policy based on the maintainable regular dividend what would you suggest the dividends in each year should be?
Include in your consideration the possibility of a special dividend or share repurchase.
C. Explain why companies tent to follow the policy in B rather than A.