Please use the spreadsheet to answer the following questions. The file contains free cash flow (cash flow from assets), standardized income statement, standardized balance sheet,
Please use the spreadsheet to answer the following questions. The file contains free cash flow (cash flow from assets), standardized income statement, standardized balance sheet, and ratio results for Qualcomm Inc.
a. What are 3 positive and 3 negative financial trends that you identify? Explain.
b. Using the information in this question and any other public information, recommend ways in which Qualcomm management can improve the firms financial performance? Explain.
Hint: The ultimate financial performance metric is shareholder returns based on market price of common stock since managements objective is to maximize shareholders wealth. In this case, results provided show you an accounting measure (ROE) of shareholder returns and incorporation of market price of common stock (Market value ratios) into ratios. Therefore, your recommendations should lead to increase in ROE Page 2 of 2 and/or market value ratios through business improvements rather than mechanical statements like reduce total equity.
QUALCOMM INC (QCOM) FREE CASH FLOW Change in networking capital = NWC-NWC -1 Total ourrent assets Total current liabilities Networking capital (NWC) = Total current assets - Total current liabilities Change in networking capital = NWC-NWC-1 2011-09 2012-09 2013-09 2014-09 2015-09 2016-09 2017-09 2018-09 2019-09 Sparklines 14293 15645 19555 22413 22099 22981 43593 17384 16765 5289 5302 5213 6013 6100 7311 10907 11236 8935 9004 10343 14342 16400 15999 15670 32686 6148 7830 1339 3999 2058 -401 -329 17016 -26538 1682 2011-09 2012-09 2013-09 2014-09 2015-09 2016-09 2017-09 2018-09 2019-09 Cash flow from assets CF(A) = OCF-CS-ANWC Operating cash flow (OCF) = EBIT + Depreciation - Taxes EBIT (Operating income) Depreciation (Depreciation & amortization from Cash Flow worksheet) Taxes (Provision for income taxes) 5026 1061 1132 5682 897 1279 7230 1017 1349 7550 1150 1244 5776 1214 1219 6269 1428 1131 2614 1461 555 742 1561 5377 7667 1401 3095 Operating cash flow (OCF) = EBIT + Depreciation - Taxes 4955 5300 6898 7456 5771 6566 3520 -3074 5973 496 5202 485 245 -23 59 -488 17 512 214 -831 991 146 76 200 1379 -12432 944 42 -1235 -125 187 -35 -216 Capital spending = Ending net fixed assets - Beginning net fixed assets + Depreciation Change in gross property, plant and equipment Change in equity and other investments Change in goodwill Capital spending (sum of changes in component accounts) Change in networking capital - NWC - NWC -1 6183 281 41 374 422 -10109 -1318 -64 1339 3999 2058 -401 -329 17016 -26538 1682 Cash flow from assets CF(A) = OCF-CS-ANWC -2222 2618 5357 5798 6473 -3387 24782 4355 QUALCOMM INC (QCOM) FREE CASH FLOW Change in networking capital = NWC-NWC -1 Total ourrent assets Total current liabilities Networking capital (NWC) = Total current assets - Total current liabilities Change in networking capital = NWC-NWC-1 2011-09 2012-09 2013-09 2014-09 2015-09 2016-09 2017-09 2018-09 2019-09 Sparklines 14293 15645 19555 22413 22099 22981 43593 17384 16765 5289 5302 5213 6013 6100 7311 10907 11236 8935 9004 10343 14342 16400 15999 15670 32686 6148 7830 1339 3999 2058 -401 -329 17016 -26538 1682 2011-09 2012-09 2013-09 2014-09 2015-09 2016-09 2017-09 2018-09 2019-09 Cash flow from assets CF(A) = OCF-CS-ANWC Operating cash flow (OCF) = EBIT + Depreciation - Taxes EBIT (Operating income) Depreciation (Depreciation & amortization from Cash Flow worksheet) Taxes (Provision for income taxes) 5026 1061 1132 5682 897 1279 7230 1017 1349 7550 1150 1244 5776 1214 1219 6269 1428 1131 2614 1461 555 742 1561 5377 7667 1401 3095 Operating cash flow (OCF) = EBIT + Depreciation - Taxes 4955 5300 6898 7456 5771 6566 3520 -3074 5973 496 5202 485 245 -23 59 -488 17 512 214 -831 991 146 76 200 1379 -12432 944 42 -1235 -125 187 -35 -216 Capital spending = Ending net fixed assets - Beginning net fixed assets + Depreciation Change in gross property, plant and equipment Change in equity and other investments Change in goodwill Capital spending (sum of changes in component accounts) Change in networking capital - NWC - NWC -1 6183 281 41 374 422 -10109 -1318 -64 1339 3999 2058 -401 -329 17016 -26538 1682 Cash flow from assets CF(A) = OCF-CS-ANWC -2222 2618 5357 5798 6473 -3387 24782 4355
