Case 7-3 Analysis of a Statement of Cash Flows

Obtain a copy of a large corporations annual report and refer to the statement of cash flows.

Required:

1. Did the company use the direct method or the indirect method of disclosing cash flows?
2. Comment on the relationship between cash flows from operations and net income for the year of the statement and the previous year.
3. What were the most significant sources of cash from operating activities during the period covered by the statement? What percentage of total cash inflows do these sources represent? Answer the same question for the previous period.
4. Was the cash from operations more than or less than dividends during the period covered by the statement and the previous period?
5. What were the firms major investing activities during the period covered by the statement and the previous period? Were cash flows from operations more or less than cash flows from investing activities for the company in question?
6. What were the most significant cash flows from financing activities during the year of the statement and the previous year?
7. Review the management discussion and analysis sections of the financial statements to determine if any additional information is available concerning the companys investment or financing strategy.

Carnival Corporation & PLC 12 Months Ended Consolidated Statements of Cash Flows - USD ($) $ in Millions Nov. 30, 2020 Nov. 30, 2019 Nov. 30, 2018 OPERATING ACTIVITIES Net Income (Loss) $(10,236) $ 2,990 $ 3,152 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities Depreciation and amortization 2,241 2,160 2,017 Impairments 4,063 26 16 Gains on fuel derivatives, net 0 0 (59) Loss on repurchases of Convertible 464 0 0 Notes Share-based compensation 105 46 65 Noncash lease expense 172 0 0 (Gain) loss on ship sales and other, net 78 43 (6) Adjustments to reconcile net income (loss) to net cash provided by (used in) (3,114) 5,265 5,186 operating activities Changes in operating assets and liabilities Receivables 125 (114) (58) Inventories 77 79 Prepaid expenses and other (209) (254) 74 Accounts payable (165) 34 (24) Accrued liabilities and other (311) 80 (100) Customer deposits (2,703) 387 539 Net cash provided by (used in) (6,301) 5,475 5,549 operating activities (67) (3,620) 334 (81) 127 (5,429) 26 0 126 (3,749) 389 (135) (19) (3,514) (3,240) (5,277) 417 2,852 (1,621) (605) (1,651) (1,556) 15,020 3,674 2,542 INVESTING ACTIVITIES Purchases of property and equipment Proceeds from sales of ships Purchase of minority interest Derivative settlements and other, net Net cash provided by (used in) investing activities FINANCING ACTIVITIES Proceeds from (repayments of) short- term borrowings, net Principal repayments of long-term debt Proceeds from issuance of long-term debt Dividends paid Purchases of treasury stock Issuance of common stock, net Other, net Net cash provided by (used in) financing activities Effect of exchange rate changes on cash, cash equivalents and restricted cash Net increase (decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash at beginning of year Cash, cash equivalents and restricted cash at end of year (689) (12) 3,249 (150) (1,387) (603) 4 (86) (1,355) (1,468) 3 (42) (1,460) 18,650 (655) 53 (9) (1) 9,161 (465) 574 530 996 422 $ 9,692 $ 530 $ 996