Background

The course syllabus outlines the Statement of Cash Flows Analysis and Free Cash Flow requirements for your Financial Company Analysis project.

Preparation

This discussion board highlights the Statement of Cash Flows using four videos. These videos will guide each student in providing an analysis of the Statement of Cash Flows and also the Free Cash Flow.  It is recommended that you read the assignment questions below before watching the videos in order to write down the answers as they appear in the videos.

The first two videos are from Warren Buffet’s free investing website. (Links to an external site.)  These two videos cover the Statement of Cash Flows.  Although not a requirement for this course, it is recommended that you watch the entire Buffett free video series if you ever plan to trade or invest in stocks or bonds on your own.  

Videos 3 and 4 are much shorter but just as important.  They contain very useful information for calculating and interpreting the Free Cash Flow required for your paper.

Assignment for Initial Thread – Due Thursday of Week 6 at 11:59 PM (EST).

After viewing the videos, find your corporations Statement of Cash Flows online. You can use your uploaded annual report to get the data.  You may also use any online sites to enhance your research.

For your initial discussion board post (a) answer the following six questions, (b) provide the Part 7 table requested and (c) provide at least one-page APA for Part 8 as requested.  Insert your company name as the thread title.   Your initial post must contain all 8 items to receive full credit.

1. As noted in the Buffett videos, what year was the Cash Flow Statement first required?
2. As noted in the Buffett videos, which row of the Cash Flow Statement is the only section of the Cash Flow statement that has longevity?
3. As noted in the Buffett videos, which row of the Cash Flow Statement should be positive in a strong corporation?
4. As noted in the Buffett videos, which two rows of the Cash Flow Statement should be negative in a strong corporation?
5. Which four companies were discussed in the second Buffett video?  Which two companies were strong?  Which two companies were weak?
6. As noted in the Free Cash Flow videos, what are the ways that companies can influence their free cash flow?
7. Create a table like the one below (example attached) with at least the three most recent years (five years preferred) of Cash Flow data for your corporation (top part similar to the one presented for “Company A” in the Buffet video, bottom part similar to the one presented at the end of the Motley Fool video) as follows. This will be included in the Statement of Cash Flows portion of your paper; therefore, thorough work is encouraged.
   Cash Flow Data20122013201420152016Operating Activities612775767874778Investing Activities(277)(55)(138)(106)(430)Financing Activities(321)(685)(592)(696)(316)Net Change in Cash1435377232Operating Activities612775767874778Capital Expenditures(192)(194)(137)(125)(172)Free Cash Flow420581630749606
8. Using the insights presented in the videos regarding positive and negative values, and any other properly referenced sources, write one-page APA of text that discusses the overall trend assessment of your company’s Statement of Cash Flows for the last three years minimum.  According to the Statement of Cash Flows, is your corporation performing well?  Why or why not?  Also, discuss the trends of your company’s Free Cash Flow.  You may also use this same post as the “one-page minimum” requirement for your corporation paper, therefore thorough work is encouraged.  Your initial post is due by Thursday of Week 6 at 11:59 PM.

After making your initial discussion board post, read the other posts and provide financially insightful comments. These comments are due by Sunday of Week 6 at 11:59 PM. To be sure you get full credit see the requirements of the discussion board grading rubric.