Financial Statement Analysis Report: Cash Flows
The purpose of this assignment is to assess the cash flow of Coca Cola by reviewing operating, investing, and financing activities.
Operating, investing, and financing activities all deal with the cash activities of Coca Cola. The cash activities provide insight into how the income, investments, and liabilities of Coca Cola will ultimately affect the statement of cash flows.
Utilizing the annual report, refer to the Notes to the Financial Statements and analyze the Coca Cola’s financial statements for the last 3 years.
Analyze the changes in operating, investing, and financing activities of Coca Cola for the last 3 years using indirect methods. Write a 500-750 word overview of the statement of cash flows for Coca Cola that addresses the following questions for each type of cash activity.
1. Review the current asset balances and explain how accounts receivables and inventory have affected the cash balance for the current fiscal year.
2. Review the current liability balances and explain how accounts payable, prepaid expenses and accrued liabilities have affected the cash balance for the current fiscal year.
3. Indicate whether the company generates enough cash to meet its operating cash needs. Provide examples of a few ways in which management could increase operating cash flows (Hint: the operating cycle/ cash cycle).
4. From the perspective of a supplier considering selling product through Coca Cola, evaluate the request to purchase product on account. What is the primary concern for selling product on account to Coca Cola?
1. Calculate Coca Cola’s free cash flows (FCF).
2. Discuss the change in cash flows from investing activities.
3. What assets did Coca Cola buy or sell over the last 3-year period? Indicate whether cash is being used to grow Coca Cola.
1. Analyze net change in financial activities. Include discussion of whether Coca Cola obtained new debt or equity financing over the last 3 years, how Coca Cola’s debt and equity changed, and whether Coca Cola paid down debt or equity in the last 3 years.
2. Explain the pros and cons of having a large cash balance.
What assets did Coca Cola buy or sell over the last 3-year period? Indicate whether cash is being used to grow Coca Cola.
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