Auto Supply Companys 2018 statement of cash flows appears in Exhibit 138. Study the statement and respond

Question:

Auto Supply Company’s 2018 statement of cash flows appears in Exhibit 13–8. Study the statement and respond to the following questions.

a. What was the company’s free cash flow in 2018?

b. What were the major sources and uses of cash from financing activities during 2018? Did the net effect of financing activities result in an increase or a decrease in cash during the year?

c. What happened to the total amount of cash and cash equivalents during the year? Assuming 2018 was a typical year, is the firm in a position to continue its dividend payments in the future? Explain.

d. Look at the reconciliation of net income to net cash provided by operating activities, and explain the following:

1. Net loss (gain) from the sale of marketable securities.

2. Increase in accounts receivable.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Free Cash Flow
Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...