Investment Analysis free essay sample

Warf Computers Financial Cash Flow $ Thousands Cash Flow of the Firm Operating Cash Flow $1,322 Capital Spending $810 Additions to net working capital $170 Total $342 Cash Flow to investors in the firm Debt $81 Equity $261 Total $342 Warf Computers Accounting Cash Flow Statement $ Thousands Operations Net Income $896 Depreciation $191 Deferred Taxes $130 Changes in Taxes and Liabilities Accounts receivable $37 Inventories $17 Accounts Payable $20 Accrued Expenses -$118 Other $11 Total Cash Flow from operations $1,088 Investing Activities Acquisition of fixed assets $1,140 Sales of fixed assets $330 Total cash flow from investing activities -$810 Financing activities Retirement of long-term debt $151 Proceeds from long-term debt sales $175 Change in notes payable $6 Dividends $225 Repurchase of Stock $48 Proceeds from new stock issue $12 Total cash flow from financing activities -$231 Change in cash $1,252 1. How would you describe Warf Computers’ cash flows? The cash flows show a positive outlook for the company. Warf Computers shows an increase in cash and assets and a decrease in liabilities. Warf Computers also shows a positive cash flow from operating activities but has also invested in an abundance of assets. We will write a custom essay sample on Investment Analysis or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page 2. Which cash flow statement more accurately describes the cash flows at the company? The financial cash flow statement more accurately describes the cash flows at Warf Computers. Although the accounting statement is more detailed, the financial statement produces the main financial picture of the company. 3. In light of your previous answers, comment on Nick’s expanision plans. Based upon the recent inquiry of fixed assets and the increased long-term debt from 2011 to 2012, my suggestion would be not to expand at this time. There needs to be an increase in net income and a decrease in spending.