Cash Flow - Analysis

Alpha Beta Gamma

Sources Increase in short term borrowings Proceeds from disposable of depreciable and other assets Proceeds from the sale of discontinued operation Proceeds from long term debts Proceeds from sale of class B common stock Other

1991 157.0

1990 242.0

1989 139.8 94.1

25.3

407.3

44.4 5.0 -

167.7 8.7 -

305.0 17.5 14.2

Sources Proceeds of subordinate debt

1991 -

1990 -

1989 4400

Proceeds from the 23.082 issuance of common stock

141

639

Sources Proceeds from issuance of debt

1991 14,249

1990 17,661

1989 40,425

Issuance of treasury shares, including tax benefits

239,653

296,225

230,733

Uses Investment in depreciable assets Investment in capitalized software Other Decrease in short term borrowings

1991 (129.7) (27.8) (6.0) (2.6)

1990 (174.4) (43.1) (13.0) (222.6) (554.8) (7.2) (0.6)

1989 (303.6) (59.5) (91.7) (26.0) (18.8)

Payment of long term (126.5) debt Dividend paid Purchase of treasury of stock (0.3)

Uses Capital expenditure

1991 (6,031)

1990 (4600) (2000)

1989 (3650) (860)

Marketable securities (8000) purchases Net payments under working capital line of credit -

Net payments under equipments line of credit Principal payment under capital lease obligation Payments of subordinated debt

(985)

(126)

(388)

(169)

(213)

(276)

(5000)

Uses Payments to retire debt Purchase of treasury shares Purchase of plant, property and equipment Increase of other asset net Purchase of Kinley business

1991 (112,426)

1990 (20,896)

1989 (153,245)

(240,719)

(270,231)

(814,958)

(737,548)

(10,27,625)

(12,23,038)

(55,782)

(75489)

(67,642)

(233,261)

2)22. CASH FLOW FROM OPERATING ACTIVITIES > NET INCOME ALPHA
Particulars Net income Net income from operating activities 1991 $(377.9) 125.2 1990 $(623.5) 89.3 1989 $(320.6) 46.8

REASONS : Adding non cash expenses (depreciation, amortization, gain from sale of investments etc)

DIFFERENCE BETWEEN NET INCOME AND NET INCOME FROM OPERATING ACTIVITIES

BETA
Particulars Net income Net income from operating activities 1991 $6,323 3,919 1990 $5,201 7,000 1989 $417 3,670

REASONS: Depreciation and amortization is the major reason affecting the net income

CASH FLOW FROM OPERATING ACTIVITIES> NET INCOME

GAMMA
Particulars Net income Net income from operating activities 1991 $(617,427) 1,040,901 1990 $(74,393) 1,434,074 1989 $(1,072,610) 1,479,391

REASONS : Adding non cash expenses

Particulars Operating activities Capital expenditure 1) Investment in depreciable assets 2) Investment in capitalize software 3) Other

1991 125.2

1990 89.3

1989 46.8

(129.7)

(174.4)

(303.6)

(27.8)

(43.1)

(59.5)

(6.0)

(13.0)

14.2

No, the firm was not able to generate cash from operating activities because there was a huge investment made in depreciable assets

Difference between operating activities and capital expenditure BETA

Particulars Operating activities Capital expenditure 1991 3919 (6031) 1990 7000 (4600) 1989 3670 (3650)

REASONS For 1991 the operating activities < capital expenditure For the other two years operating activities> capital expenditure

Difference between operating activities and capital expenditure GAMMA

Particulars Operating activities Capital expenditure 1) Purchase of plant, property and equipment 2) Purchase of Kienzle business 1991 1,040,901 (737,548) 1990 1,434,074 (1,027,625) 1989 1,479,391 (1,223,038)

(233,261)

Yes, firm was able to generate cash from operating activities

1989 1. 2. 3. Net cash provided by operating activities Capital expenditure Dividend paid 46.8 (348.9) (26)

1990 89.3 (230.5) (7.2)

1991 125.2 (163.5) -

Company did not cover both the capital expenditure and the firm s dividend payments during all the 3 years

1991 1. 2. Net cash provided by operating activities Capital expenditure Excess cash 3919 (6,031) -

1990 7000 (4600) 2400

1989 3670 (3650) 20

Investment of excess cash for the year 1990 1) Net payments under working capital line of credit-(2000) 2) Net payments under equipment line of credit-(126) 3) Principal payment under capital lease obligation-(213)

Investment of excess cash GAMMA

1991 1. 2. Net cash provided by operating activities Capital expenditure 1) Purchase of plant, property and equipment 2) Purchase of kienzle business Excess cash 1,040,901 1990 1,434,074 1989 1,479,391

(737,548)

(1,027,625)

(1,223,038)

(233,261) 70092 4,06,449 2,56,353

1) Payments to retire debt in the year 1990 for amount (20896) 2) Purchase of treasury shares in the year 1990(270,231)

Sources of Cash 1. 2. Net cash provided by operating activities Capital expenditure 1) Investment in depreciable assets 2) Investment in capitalize software 3) Other Dividend paid

1991 125.2

1990 89.3

1989 46.8

(129.7) (27.8) (6.0) (26)

(174.4) (43.1) (13.0) (7.2)

(303.6) (59.5) 14.2 (26)

3.

The company generated funds to pay its capital expenditure or dividends 1) Proceeds from disposable of depreciable and other assets 2) Proceeds from the sale of discontinued operations 3) Restructuring and other unusual items

6)Sources of cash to pay capital expenditure/dividends(BETA)

Sources of Cash 1. 2. Net cash provided by operating activities Capital expenditure 1991 3919 (6,031) 1990 7000 (4600) 1989 3670 (3650)

The company generated funds to pay its capital expenditure or dividends 1) Issuance of common stock

6)Sources of cash to pay capital expenditure/dividends(Gamma)

Sources of Cash 1. 2. Net cash provided by operating activities Capital expenditure 1) Purchase of plant, property and equipment 2) Purchase of kienzle business 1991 1,040,901 1990 1,434,074 1989 1,479,391

(737,548)

(1,027,625)

(1,223,038)

(233,261)

The company generated funds to pay its capital expenditure or dividends 1) Issuance of treasury shares, including tax benefits 2) Proceeds from issuance of debt

7) ALPHA
Particulars Current Assets 1) Accounts receivable 2) Inventory 3) Other current assets Total 1991 1990 1989

160.8 80.2 17.0 258

73.4 100.9 (1.2) 173.1

(45.2) (3.0) (13.0) (61.2)

Current Liabilities 1) Accounts payable 2) Others (91.3) 2.8 Total (CA-CL) (88.5) 346.5

(21.3) 14.1 (7.2) 180.3

41.0 (10.5) 30.5 (91.7)

BETA
Particulars Current Assets 1) Accounts receivable 2) Inventory 3) Other current assets Total Current Liabilities 1) Accounts payable 1991 1990 1989 (10,837) (951) (665) (12453) (613) (810) 366 (1057) (1,550) 1043 (762) (1269)

5657

(310)

2067

Total (CA-CL)

5657 (18110)

(310) (1367)

2067 (3336)

GAMMA
Particulars Current Assets 1) Accounts receivable 2) Inventory 3) Prepaid Expenses Total Current Liabilities 1) Accounts payable 2) Customer advances 3) Other liabilities 4) Restructuring reserve Total (CA-CL) 1991 1990 1989 105977 18,616 (47,339) 77354 (241357) 99,743 (90602) (232216) (373,248) (62,942) 18965 (417225)

(17694) 92222 1263 593160 668951 746305

107001 69207 285175 443544 904927 (1137143)

30645 105847 26576 163068 (580293)

CONCLUSION !!