Question
Formulating Financial Statements from Raw Data Following is selected financial information from Cisco Systems, Inc., for its fiscal year ended July 30, 2016 ($ millions).
Formulating Financial Statements from Raw Data Following is selected financial information from Cisco Systems, Inc., for its fiscal year ended July 30, 2016 ($ millions).
Cash, ending year | $7,631 | Total liabilities | $58,067 |
Cash from operating activities | 13,570 | Cash from financing activities | (4,699) |
Sales | 49,247 | Noncash assets | 114,021 |
Stockholders' equity | 63,585 | Cash from investing activities | (8,117) |
Cost of goods sold | 18,287 | Net income | 10,739 |
Total expense (other than cost of goods sold) | 20,221 | Cash, beginning year | 6,877 |
(a) Prepare the income statement, the balance sheet, and the statement of cash flows for Cisco Systems for the fiscal year ended July 30, 2016. Hint: Enter negative numbers only in answers for the statement of cash flows (if applicable).
Cisco Systems, Inc Income Statement ($ millions) For Year Ended July 30, 2016 | |
---|---|
Sales | $Answer |
AnswerExpensesCost of goods soldCash, ending year | Answer |
Gross profit | Answer |
AnswerExpensesCost of goods soldCash, ending year | Answer |
Net income | $Answer |
Cisco Systems, Inc Balance Sheet ($ millions) July 30, 2016 | ||||
---|---|---|---|---|
Cash | $Answer | Total liabilities | $Answer | |
AnswerNoncash assetsNet incomeCash, beginning yearStockholders' equity | Answer | AnswerNoncash assetsNet incomeCash, beginning yearStockholders' equity | Answer | |
Total assets | $Answer | Total liabilities and equity | $Answer |
Cisco Systems, Inc Statement of Cash Flows ($ millions) For Year Ended July 30, 2016 | |
---|---|
Cash from operating activities | $Answer |
AnswerNoncash assetsCash from investing activitiesCash, beginning yearNet income | Answer |
Cash from financing activities | Answer |
Net change in cash | Answer |
AnswerNoncash assetsCash used in investing activitiesCash, beginning yearNet income | Answer |
Cash, ending year | $Answer |
(b) Do the negative amounts for cash from investing activities and cash from financing activities concern us? Explain.
A negative amount for cash from financing activities implies that the company is unable to pay its debts as they come due and should be interpreted negatively.
A negative amount for cash from investing activities is the result of additional borrowings. Because the additional funds are invested in earnings-generating assets, this should be viewed positively.
A negative amount for cash from investing activities implies that the market value of the company's long-term assets has declined and this change should be viewed negatively.
A negative amount for cash from financing activities reflects the reduction of long-term debt, which is a positive sign of the companys ability to retire debt obligations.
(c) Using the statements prepared for part a. compute the following ratios (for this part only, use the year-end balance instead of the average for assets and stockholders' equity):
Round answers to two decimal places (example for percentage answers: 0.12345 = 12.35%)
(i) Profit margin Answer% (ii) Asset turnover Answer (iii) Return on assets Answer% (iv) Return on equity Answer%
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