United States Surgical Corporation (USSC) provided the following consolidated statement of cash flows, as abbreviated:

Year Ended December 31, 1993 1992 Cash flows from operating activities:

Cash received from customers $1,103,300 $1,087,700 Cash paid to suppliers and employees (941,200) (905,900)

Interest paid (18,300) (15,600)

Income taxes paid (12,800) (18,400)

Net cash provided by operating activities 131,000 147,800 Cash flows from investing activities:

Property, plant, and equipment purchases (216,400) (270,700)

Other asset purchases (31,100) (31,100)

Net cash used in investing activities (247,500) (301,800)

Cash flows from financing activities:

Long-term debt borrowings 2,614,400 1,840,800 Long-term debt repayments (2,495,900) (1,696,000)

Common stock issued 8,100 35,200 Dividends paid (13,700) (16,400)

Repurchases of common stock — (16,100)

Net cash provided by financing activities 112,900 147,500 Net decrease in cash $ (3,600) $ (6,500)

Required

a. Identify and discuss any unfamiliar terms or unusual treatments in USSC’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 USSC’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 USSC’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:

Net sales $1,037,200 $1,197,200 Net income (loss) (138,700) 138,900 Interest expense 18,500 14,700 Income taxes 1,300 54,000 Total assets 1,170,500 1,168,000 Long-term debt 137,500 110,700 Stockholders’ equity 443,900 590,000 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 USSC’s performance.In what areas do the cash flow ratios represent positive or negative performances?
g. What add