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Activity Instructions: Cash Flow Analysis

Your task for this Activity is to complete a preliminary report on Apple Computer's cash flow. The majority of this report requires computing cash flow measures and charting them, rather than analyzing cash flow. You will later analyze this information as part of your Stand-Alone Project. The first two pages of this report should contain an addition of information to the Average BS and Ratios worksheets. The next six pages will consist of the addition of selected cash flow charts (one (1) chart per page, six (6) charts) to the PC Charts workbook). The final page will be a Word document addressing a few cash flow considerations. Follow these instructions to facilitate report completion. Your Activity responses should be both grammatically and mechanically correct and formatted in the same fashion as the Activity itself. If there is a Part A, your response should identify a Part A, etc. In addition, you must appropriately cite all resources used in your response and document them in a bibliography using APA style. (100 points) (A 2-page narrative response, Average BS worksheet, and six (6) charts are required.)

Part A	Compute Apple Computer's cash received from customers, cash collected as a percentage of revenues, cash paid to suppliers, and cash paid as a percentage of cost of goods sold for 1999-2002. Use the Average BS" worksheet in your Apple Solution workbook to report your answers. First, insert Apples income statements from Supplement I. Then do your calculations below the 1999-2002 income statements. (25 points) (The Average BS worksheet with the income statements and the four (4) additional values is required.)
Part B	Compute the following cash flow ratios for 1999-2002 in the "Ratios'" worksheet in your Apple Solution workbook. (25 points) (The Ratios worksheet with the ten (10) additional ratios is required.)
	1.	Cash Flow Adequacy
	2.	Reinvestment Ratio
	3.	Long-Term Debt Repayment
	4.	Dividend Payout
	5.	Free Cash Flow
	6.	Depreciation Impact
	7.	Recapitalization Index
	8.	Cash Flow Return on Assets
	9.	Cash Flow Return on Sales
	10.	Operations Index
Part C	Use the "PC Charts" workbook to create the following six (6) "line" charts. For this activity, you will only chart Apple's cash flow measures. Plot all graphs from 1994 through 2002. Use data from Appendix A on page 347 of the text for 1994-1998 measures and your computations from 1999-2002. (25 points) (The PC Charts workbook with the six (6) additional charts is required.)
	1.	Cash Flow Adequacy
	2.	Free Cash Flows
	3.	Recapitalization Index
	4.	Cash Flow Return on Assets
	5.	Cash Flow Return on Sales
	6.	Operations Index
Part D	Discuss the value of computing Apple's cash collections from customers and cash payments to suppliers and whether or not these amounts were stable from 1999-2002. (12 points) (A 1-page response is required.)
Part E	Discuss the stability of Apples operations index from 1994-2002. (13 points) (A 1-page response is required.)

Additional resources for assignment

• Supplement I.xls( 22 KB; Aug 21, 2012 9:28 am )