Vonage Case

In 2010, BAC reported a net loss of $2.2 billion compared to net income of $6.3 billion in 2009. (pg 31) In comparison, WFC reported a profit increase for the full year of 2010. WFC year-end net income was $12.4 billion in 2010 compared to $12.28 billion in 2009. This is a 1% increase. Wells Fargo attributed most of its increase in net income to revenue growth across many business sectors, improvement on asset quality, and the acquisition of Wachovia Corporation. The increase in net income was also attributable to a reduction in provision for credit losses; the bank was able to lessen its

(which is revenue minus cost of good/services) after taking out operating expenses - such as cost of goods sold and depreciation ,basically performed on the accrual basis. The revenue are recognized in the period actually earned and cash need not to be received on that period for recognizing the revenue. Therefore net cash flow and operating profit is different

While costs have increased from $76,750,000 in 2003 to $97,870,000 in 2005, the gross margin have decreased from 33.2% in 2003 to 23.8% in 2005. The company is unfortunately in debt, but they have enough assets to cover it and will allow for the development of new products and information systems.

2013). In most cases, accrual basis net income provides a better measure of performance than net operating income cash flow. As stated by newspaper article, very small companies start out by using the cash basis (Anonymous 2011). The article also states it is easier for them to track cash flow which is the lifeblood of a company. Cantu states, “The first downside is that cash accounting can make operations appear financially healthier than they are.” Her example states, a contractor gets a $20,000 remodeling job and orders $8, 000 worth of supplies on credit. He starts the job on March 1 and receives a $5,000 deposit before beginning his work. With cash accounting, it appears that he has made $5,000 revenue in March. Despite appearances of being in the black, he is actually in the red $3,000 because he still has to pay for his supplies. Another problem, with cash accounting Cantu states, it is easy to confuse cash flow with profit, "If producers are able to pay their bills, many assume that they are making a profit, when actually they 're just experiencing cash flow," Bevers says. "True profit occurs when a producer has paid all of the expenses including depreciation and has built wealth." The text book also supports the fact that net operating cash flow may not

Since the net income reported in the statement of cash flows is transferred from the profit and loss account which is the difference between revenue and expenditures all of two types;

This is the starting point for preparation used by accountants and business owners. The income statement is significant because it shows how successful a company is during the time interval specified in its heading. Businesses pay particular attention to the profitability of how successful they were for that period. If for any reason a company was not able to operate profitably, people such as bankers, lenders, and or creditors may be cautious to grant additional credit to the company. Net income deals with the amount of money left over after all operating expenses, interest, taxes and preferred stock dividends which were deducted from a company’s total revenue. CAH produced net income in both 2015 and 2014, $2,986,000,000 in 2015 and $2,821,000,000 in 2014.

The proceeds from Vonage's common stock issuance net afforded Vonage to pay off over $250 million dollars in debt.

According to Hermanson, R., Maher, M., & Edwards, J. by definition an income statement “is a financial statement that shows cases a companies’ profitability during a set period”. How that profitability is measure is by comparing the revenues earned with the expenses incurred to produce these revenues. If the production of these revenues exceed the expenses that they incurred than the company has gained a net income and if the expenses incur were to exceed the revenue than the company has suffered a net loss.

Vonage has been operating at a loss from 2006-2008. This loss is shown in its income and cash flow.

According to Don Hofstrand in his article has said that (The main objective of any business project is profitability without profits, the project will not last long. So it's important measured the previous profitability and current profitability as well as predict of future profitability this is done by measuring expenses and income. Income is the money produced by the business. An example is the manufacture of wooden chairs the resulting sale is considered income, but some of the money that may enter the business like borrowing some money is not considered an income of the company, it's like a cash transaction between the lender and the business for generate this money for operating the buying assets or business.

On October 22, 2016, AT&T bought out Time Warner for eighty-five billion dollars. The agreement totaled to be one-hundred and nine dollars with debt. Time Warner is the parent company to many big name channels including, CNN, TNT, HBO and Warner Bros. This major purchase proves that AT&T has a totally different strategy than its big-time rival, Verizon. CFO of Version, Fran Shammo, commented in response to AT&T’s deal, stating that he believes they have the right asset and that there is no large company out there that they need to purchase in order to be successful. Verizon recently made some smaller purchases but seemed but more insignificant with AT&T’s major buy. For nine million billion dollars, AT&T acquired AOL and Yahoo. They

When looking at the data provided Vonage Holdings Corporation's net income is mainly low when it comes to comparing it to its cash flow from the activities when operating. In 2006, the Net Income was $ -388,573 when the cash flow from the activities when operating was $-188,898. In 2007, the net income was $-267,428 while its cash flow from the operating activities was equal to $-270,926. Eventually, in 2008, the net income was equal to $-64,576, but its cash flow from operating activity was a positive value of $655.

Net income (profit) is the money that remains with your company after deducting all the expenses, while cash flow means the money that flows in and out of a company for its various activities.

Chapter fourteen focused on statements of cash flow from various corporations. Even though many organizations report net losses on their earning statements, they also report positive cash flows from operating activities. Vonage is a real example of how a company can be both positive and adverse in the statement of cash flows. To answer the first question, how does Vonage’s net income for each year compare to its cash flows from operating activities. One must first analysis the statements of cash flow in detail. An individual first observes the cash flows from operating activities referencing to the net income (loss). The following amounts become apparent. The year 2008 the net income was $ - 64,576 million. The year 2007 the net income was

An income statement reports the profitability of a company’s operations over a period of time (Weygandt, 2008). Net income is when a company’s revenues exceed their expenses, as opposed to net loss when a company’s expenses exceed their revenues, and will not include investment or dividend transactions. Disney has had the success in being able to report all net income on at least three of its last income statements.