Lindt & Spriingli AG (Lindt) is a maker of fine chocolates based in Switzerland. Use their consolidated balance sheet, income statement, and cash flow statement, presented in Exhibit 2-6A and Exhibit 3-24, to answer the following questions.
a. There is a large difference between Lindt's net income and its cash from operating activities in 2009. The largest item contributing to the difference is Depreciation, amortization, and impairments. (For simplicity at this point you can ignore impairments and assume the entire expense consists of depreciation and amortization charges.)
1. What were the Net income, Cash from operations, and Depreciation and amortization for 2009? Where did you find those amounts?
2. What would have been the journal entry to record the depreciation and amortization?
3. Explain why depreciation is added back to net income in determining cash from operating activities.
b. What amount of dividends did Lindt pay during 2009? Where did you find that information? What would have been the journal entries to record the declaration of the dividends and the subsequent payment of the dividends?
c. Compare the profitability of Lindt in 2009 to 2008 using the profit margin ratio (Refer to Chapter 2 if you need to review the profit margin ratio.) Using the additional information Lindt provides on the income statement, discuss the main factors that have led to the change in the profit margin ratio from 2008 to 2009.