DISCUSSION 1 & 2

DISCUSSION 1 Describe the following terms as they relate to the statement of cash  flows: cash, operating activities, investing activities, and financing  activities. What can creditors, investors, and other users glean from an  analysis of the statement of cash flows?

DISCUSSION  2 :

 

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

 
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