Case Alpha Corp

Only available on StudyMode
  • Download(s) : 73
  • Published : February 15, 2013
Open Document
Text Preview
For Alpha Corporation

Part 1
1) Sources of Cash – Accounts receivable (payment from customers) , Proceeds from Sale of assets(PP&E), proceeds from sale of discontinued operations, Issue of Stock and long term debt

Use of Cash – Buying of inventories, Account payables (payments to suppliers) , Purchase of Assets(PP&E), Investment in capitalized software, principal payment of short term debt, Repurchase of Stock, Dividends paid

2) Cash flow from operations (125.2, 89.3, and 46.8) was greater than that from net income (- 377.9, -623.5 , and -320.6). The reason for difference is lot of non- cash expenditure such as depreciation, amortization, and restructuring was deducted from the revenues to come to Net Income. Also, the gain from investment was deducted from the Net income as it is also a non-cash item.

3) No, the cash generated from operations (125.2, 89.3, and 46.8) was less than the investment in capital expenditure (129.7, 174.4, and 303.8)

4) No, the cash generated from operations (125.2, 89.3, and 46.8) was less than the total of investment in capital expenditure (129.7, 174.4, and 303.8) and dividends paid(0, 7.2, and 26.0 ).

5) Not applicable

6) Alpha corp used the following sources to fund capital expenditure and dividends - Proceeds from Sale of assets (PP&E), proceeds from sale of discontinued operations, Issue of Stock and long term debt.

7) Yes, Currents assets such as account receivables, inventory, and other current assets and current liabilities such as Accounts payable were uses and source of cash from the working capital respectively.

8) The other major items that impacted cash are - payments of long term debt , and proceeds from Disposal from PP&E

Part 2
1) Net Income- in the last three years NI has decreased from -320.6 to -377.9. That is the company has been incurring increasing losses.

2) Cash flow from operations - in the last three years CFO has...
tracking img