Exersice 1
The 2012 statement of cash flows for technology company Hewlett-Packard reported a net loss of $12.7 billion and net cash provided by operating activities of $10.6 billion. Depreciation and amortization totaled $5.1 billion. HP used the indirect form of presenting the statement of cash flows.
a. How is depreciation disclosed on the statement of cash flows? Why?
b. Why doesn't net earnings plus depreciation equal net cash provided by operating activities?
c. One large non-cash impairment expense totaled $18.0 billion. Provide an estimate of the net change in current assets and current liabilities for HP during 2012
Exersice 2
Pier 1 Imports reported retail sales for fiscal 2012 of $1.7 billion. During the year, accounts receivable increased from $16.3 million to $22.3 million.
Estimate the cash collected by Pier 1 from its customers during 2012.
Exercise 3
Pier 1 Imports reported cost of sales of $962 million for fiscal 2012. Inventory increased during the year from $322 million to $356 million, and accounts payable (related to inventory purchases) decreased from $64 million to $59 million.
a. Estimate the cost of inventories purchased during 2012.
b. Estimate the cash payments made to inventory suppliers during 2012.