StorageTek’s consolidated statement of cash flows contained the following information, as abbreviated (dollars in thousands):

Year Ended December December 31, 1993 25, 1992 Operating Activities Cash received from customers $1,532,183 $1,572,892 Cash paid to suppliers and employees (1,446,321) (1,456,835)

Interest received 54,251 67,136 Interest paid (40,519) (47,751)

Income taxes paid (12,048) (28,327)

Net cash from operating activities 87,546 107,115 Investing Activities Short-term investments, net (15,377) 40,227 Purchase of property, plant, and equipment (67,720) (106,119)

Business acquisitions, net of cash — (51,761)

Other assets, net (6,945) (4,136)

Net cash used in investing activities (90,042) (121,789)

Financing Activities Proceeds from preferred stock offering 166,479 —

Proceeds from nonrecourse borrowings 87,508 114,935 Repayments of nonrecourse borrowings (147,647) (169,005)

Proceeds from other debt 79,740 21,320 Repayments of other debt (44,144) (27,538)

Other financing activities 2,009 61,050 Net cash from financing activities 143,945 762 Effect of exchange rate changes (4,341) (4,884)

Increase (decrease) in cash $ 137,108 $ (18,796)

Required

a. Identify and discuss any unfamiliar terms or unusual treatments in StorageTek’s cash flow statement.

b. Discuss the differences between net cash provided by operating activities and cash received from customers.

c. From the data above, evaluate StorageTek’s overall cash flows or cash balances at the end of each year.

d. What part of the balance sheet or cash flow statement would help you better evaluate StorageTek’s overall cash flows or cash balances at the end of either year? Why?

e. Given the following additional balance sheet and income statement data (dollars in thousands):
1993 1992 Net sales $ 902,482 $1,079,130 Net income (loss) (77,796) 9,334 Interest expense 43,670 48,706 Income taxes 5,000 17,700 Total assets 1,793,009 1,739,043 Long-term debt 361,718 369,988 Stockholders’ equity 1,017,303 927,913 Calculate the following ratios for each year:
1. Cash return on assets (1993 only)
2. Quality of sales 3. Quality of income 4. Cash interest coverage

f. Based on these ratios, evaluate StorageTek’s performance. In what areas do the cash flow ratios indicate positive or negative performances?
g. What additional information would be useful in evaluating StorageTek’s performance?
h. StorageTek’s 1991 fiscal year ended on December 27.Would the difference in the number of days or number of weeks in each fiscal year affect any of the above analyses? Why?