In the textbook there are 21 questions provided regarding items to consider when conducting an industry analysis. Review the questions listed on pages 116 and 117. Choose three that you think are the most important of all questions provided. Discuss why those three items are important when conducting an industry analysis. Participate in follow-up discussion by reviewing classmates’ posts and discussing whether the cost leadership or differentiation competitive strategy would be the most effective approach based on the three items provided.
Answer the following questions:
(a) For each year:
1. What were the firm’s major sources of cash? Its major uses of cash?
2. Was cash flow from operations greate r or less than net income? Explain in detail
the major reasons for the difference between these two figures.
3. Was the firm able to generate enough cash from operations to pay for all of its
capital expenditures?
4. Did the cash flow from operations cover both the capital expenditures and the
firm’s dividend payments, if any?
5. If it did, how did the firm invest its excess cash?
6. If not, what were the sources of cash the firm used to pay for the capital
expenditures and/or dividends?
7. Were the working capital accounts primarily sources of cash, or users of cash?
8. What other major items affected cash flows?
(b) What was the trend over the three years in:
9.Net income?
10. Cash flow from (continuing) operations?
11. Capital expenditures?
12. Dividends?
13. Net borrowing (proceeds less payments of short- and long-term debt)?
14. Working capital accounts?
(c) Based on the evidence in the statement of cash flows
alone, what is your assessment
of the financial strength of this business? Be as specific as possible in your
assessment
