FINANCE
Analyzing the Statement of Cash Flows
4.6. The following cash flows were reported by Techno Inc. in 2008 and 2007.
(In thousands) 2008 2007
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 (94,176) (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 borrowings 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
(a) Explain the difference between net income and cash flow from operating activities for Techno in 2008.
(b) Analyze Techno Inc.’s cash flows for 2008 and 2007.
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