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How do you calculate Cash from operating activities?

How do you calculate Cash from operating activities?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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How do you calculate Cash from operating activities?

Forecast the Statement of Cash Flows Following are the income statement and balance sheet of Seagate Technology. SEAGATE TECHNOLOGY PLC Consolidated Statement of Income June 2020 June 2019 ($ millions) For Year Ended Forecasted Actual Revenue $ 10,910 $ 10,390 Cost of revenue 7,833 7,458 Product development 1,036 991 Marketing and administrative 480 453 Amortization of intangibles 23 23 Restructuring and other, net (22) Total operating expenses 9,372 8,903 Income from operations 1,538 1,487 Interest income 84 84 Interest expense (224) (224) Other, net 25 25 Other expense, net (115) (115) Income before income taxes 1,423 1,372 (Benefit) provision for income taxes 299 (640) Net income $4 1,124 $ 2,012 SEAGATE TECHNOLOGY PLC Balance Sheet June 2020 June 2019 Actual |($ millions) Forecasted Current assets Cash and cash equivalents $ 2,935 $ 2,220 Accounts receivable, net 1,036 989 Inventories 1,015 970 Other current assets 196 184 Total current assets 5,182 4,363 Property, equipment and leasehold improvements, net 1,971 1,869 Goodwill 1,237 1,237 Other intangible assets, net 88 111 Deferred income taxes 1,167 1,114 Other assets, net 196 191 Total assets 24 9,841 $ 8,885 Current liabilities Accounts payable 1,495 $1,420 Accrued employee compensation 175 169 Accrued warranty 98 91 Accrued expenses 578 552 Total current liabilities 2,346 2,232 Long-term accrued warranty 109 104 Long-term accrued income taxes 4 4 Other noncurrent liabilities 142 130 Long-term debt, less current portion 4,253 4,253 Total liabilities 6,854 6,723 Shareholders' equity Ordinary shares- par value $0.0001, 2.6 billion shares authorized, 1,340,697,595 and and1,354,218,154 shares issued and outstanding, respectively Additional paid-in capital 6,644 6,545 Accumulated other comprehensive loss (34) (34) Accumulated deficit (3,623) (4,349) Total shareholders' equity 2,987 2,162 Total liabilities and shareholders' equity 9,841 $ 8,885 CAPEX (Increase in gross Property and equipment)/Revenue 5.8% Depreciation expense $633 Dividends $398 Refer to the Seagate Technology (STX) financial information above. Prepare a forecast of its FY2020 statement of cash flows. Round all answers to the nearest whole number. Use negative signs with answers, when appropriate.
Transcribed Image Text:Forecast the Statement of Cash Flows Following are the income statement and balance sheet of Seagate Technology. SEAGATE TECHNOLOGY PLC Consolidated Statement of Income June 2020 June 2019 ($ millions) For Year Ended Forecasted Actual Revenue $ 10,910 $ 10,390 Cost of revenue 7,833 7,458 Product development 1,036 991 Marketing and administrative 480 453 Amortization of intangibles 23 23 Restructuring and other, net (22) Total operating expenses 9,372 8,903 Income from operations 1,538 1,487 Interest income 84 84 Interest expense (224) (224) Other, net 25 25 Other expense, net (115) (115) Income before income taxes 1,423 1,372 (Benefit) provision for income taxes 299 (640) Net income $4 1,124 $ 2,012 SEAGATE TECHNOLOGY PLC Balance Sheet June 2020 June 2019 Actual |($ millions) Forecasted Current assets Cash and cash equivalents $ 2,935 $ 2,220 Accounts receivable, net 1,036 989 Inventories 1,015 970 Other current assets 196 184 Total current assets 5,182 4,363 Property, equipment and leasehold improvements, net 1,971 1,869 Goodwill 1,237 1,237 Other intangible assets, net 88 111 Deferred income taxes 1,167 1,114 Other assets, net 196 191 Total assets 24 9,841 $ 8,885 Current liabilities Accounts payable 1,495 $1,420 Accrued employee compensation 175 169 Accrued warranty 98 91 Accrued expenses 578 552 Total current liabilities 2,346 2,232 Long-term accrued warranty 109 104 Long-term accrued income taxes 4 4 Other noncurrent liabilities 142 130 Long-term debt, less current portion 4,253 4,253 Total liabilities 6,854 6,723 Shareholders' equity Ordinary shares- par value $0.0001, 2.6 billion shares authorized, 1,340,697,595 and and1,354,218,154 shares issued and outstanding, respectively Additional paid-in capital 6,644 6,545 Accumulated other comprehensive loss (34) (34) Accumulated deficit (3,623) (4,349) Total shareholders' equity 2,987 2,162 Total liabilities and shareholders' equity 9,841 $ 8,885 CAPEX (Increase in gross Property and equipment)/Revenue 5.8% Depreciation expense $633 Dividends $398 Refer to the Seagate Technology (STX) financial information above. Prepare a forecast of its FY2020 statement of cash flows. Round all answers to the nearest whole number. Use negative signs with answers, when appropriate.
CAPEX (Increase in gross Property and equipment)/Revenue 5.8% Depreciation expense $633 Dividends $398 Refer to the Seagate Technology (STX) financial information above. Prepare a forecast of its FY2020 statement of cash flows. Round all answers to the nearest whole number. Use negative signs with answers, when appropriate. SEAGATE TECHNOLOGY PLC Forecasted Statement of Cash Flows ($ millions) June 2020 Net income 1,124 v Add: Depreciation 531 v Add: Amortization 23 V Add: Stock based compensation 99 Change in Accounts receivable, net (47) Change in Inventories (45) v Change in Other current assets (12) Change in Deferred income taxes (53) Change in Other assets, net (5) V Change in Accounts payable 75 V Change in Accrued employee compensation Change in Accrued warranty Change in Accrued expenses 26 v Change in Long-term accrued warranty 5 V Change in Long-term accrued income taxes Change in Other non-current liabilities 12 V Cash from operating activities 716 X Capital Expenditures (633) Net cash from investing activities (633) Dividends (398) Net cash from financing activities (398) v Net change in cash 715 V Beginning cash 2,220 Ending cash $4 2,935
Transcribed Image Text:CAPEX (Increase in gross Property and equipment)/Revenue 5.8% Depreciation expense $633 Dividends $398 Refer to the Seagate Technology (STX) financial information above. Prepare a forecast of its FY2020 statement of cash flows. Round all answers to the nearest whole number. Use negative signs with answers, when appropriate. SEAGATE TECHNOLOGY PLC Forecasted Statement of Cash Flows ($ millions) June 2020 Net income 1,124 v Add: Depreciation 531 v Add: Amortization 23 V Add: Stock based compensation 99 Change in Accounts receivable, net (47) Change in Inventories (45) v Change in Other current assets (12) Change in Deferred income taxes (53) Change in Other assets, net (5) V Change in Accounts payable 75 V Change in Accrued employee compensation Change in Accrued warranty Change in Accrued expenses 26 v Change in Long-term accrued warranty 5 V Change in Long-term accrued income taxes Change in Other non-current liabilities 12 V Cash from operating activities 716 X Capital Expenditures (633) Net cash from investing activities (633) Dividends (398) Net cash from financing activities (398) v Net change in cash 715 V Beginning cash 2,220 Ending cash $4 2,935
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