Obtain recent financial statements for two or three companies.If possible,these companies should be in the same industry and they should use the same method in reporting their cash flows from operating activities. Ideally, they will all use the direct method,though it will be hard to identify three such companies in the same industry who are otherwise comparable.

Required

a. Summarize each company’s cash flow from operations in tabular and graphical formats. Calculate the relevant cash-based ratios from this chapter.

b. Summarize each company’s net operating income in tabular and graphical formats.

c. Identify the cash flow strategies of each company by examining the operating, financing, and investing activities sections of each cash flow statement.

d. Write a short memo to a potential investor in which you critique the cash flow strategies of each company. Identify which company might offer the most favorable prospects for increasing its operating cash flows.