Question

compare income statment and balance sheet for the last two years

any changes?

analyize cash flow

operating activities

investing activities

financing activities

of Financial Position Statements February 3, Janua millions, except footnotes) $ 2,643 $ 2,512 8,309 1.169 11,990 8,657 1,264 12,564 equivalents Cash and cash Other current assets Total current assets Property and equipment 6,095 28,396 5,623 2,645 6,106 27,611 5,503 2,651 Buildings and improvements Fixtures and equipment Computer hardware and software 440 200 Construction-in-progress Accumulated depreciation (18,181) (17,413) Property and equipment, net Other noncurrent assets Total assets Liabilities and shareholders' investment Accounts payable 24,658 783 S 38,999 $ 37,431 25,018 1,417 $ 8,677 $ 7,252 3,737 Accrued and other current liabilities 4,254 270 13,201 11,317 713 2,059 14,089 Current portion of long-term debt and other borrowings Total current liabilities Long-term debt and other borrowings Deferred income taxes 12,707 861 1,879 13,771 t liabilities Total noncurrent liabilities Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total shareholders' investment 45 5,858 6,553 5,661 5,884 11,709 38,999 S 3743 10,953 Total liabilities and shareholders' investment Common Stock Authorized 6,000,000,000 shares, $0.0833 parvalue: 541,681,670 shares issued and outstanding at February 3, 2018;556.156.228 shares issued and outstanding at January 28, 2017 Preferred Stock Authorized 5,000,000 shares, 50.01 par value; no shares were issued or outstanding at February 3, 2018 or January 28, 2017 See accompanying Notos to Consolidated Financial Statements. 37 2015 5 52,241 Consolidated Statements of Operations 2016 2017 71,879 $ 69,495 73,78 Sales Cost of sales Gross margin Seling, general and administrative expenses 49,145 20,754 20,350 14,248 13,356 2,025 51,125 21,544 14,665 1,969 620 of sales)and amortization (exclusive of depreciation included in cost 2,194 Gain on sale mings from continuing operations before interest expense and income 4,969 1,004 3,965 1,296 2,669 68 5,530 607 4,923 1,602 3,321 42 737 $ 3,363 taxes 4,312 Net interest expense Earnings from continuing operations before income taxes Not earnings from continuing operations Net earnings 3,646 718 2,928 Provision for income taxes 2934 S Basic earnings per share Continuing operations Discontinued operations S 5.35 S 4.62 $ 5.29 0.07 5.35 0.01 5.36 $ Net earnings per share Diluted earnings per share 4.74 $ Continuing operations Discontinued operations Net earnings per share $ 5.32 S 4.58 S 5.25 0.07 5.31 0.01 5.33 0.12 4.70 S Weighted average common shares outstanding Basic Dilutive effect of share-based awards Diluted 546.8577.6627.7 5.2 632.9 3.5 Antidilutive shares 0.1 Dividends declared per share $ 2.46 $ 2.20 Note: Per share amounts may not foot due to rounding Refer to Note 3 for additional information about a reclassification of supply chain-related depreciation expense to Cost of Sales See accompanying Notes to Consolidated Financial Statements h Consolidated Statements of Cash Flows 2017 2016 2015 2,934 $ 3,363 3.321 2,213 2,737 $ Earnings from discontinued operations, net of tax Net earnings from continuing operations Adjustments to reconoile net eamings to cash provided by operations: 68 2.669 2,928 Depreciation and amortization 2.445 112 2,298 113 115 Delerred income taxes 192) Gain on sale Loss on debt extinguishment Noncash (gains)/losses and other, net Changes in operating accounts: (348) (168) (316) 221 Other assets Accounts payable Accrued and oher lablities 30 (165) 450 6,849 947 by operatingact ,958 (2533) (1547)(1,438) 1,875 436 Investing activities s for property and equipment Proceeds from disposal of property and equipment Cash paid for acquisitions, net of cash assumed Cash (required for)/ provided by investing ac 31 46 28 Financing activities Addsions to long-term debt Dividends paid Repurchase of stock Stock eption ex 739 2.180) (1.338) (1,046) 1,977 2.641) (1,348) 3,706) (3.483) (1,382) of period equlvalents at and of periesd 2,512 2.643 2,210 4,046 Interest paid, net of capitalized interest Income taxes paid/(refunded) 678 $ 9e9 S 1,514 (127) ee accompanying Notes to Consolidated Financial Statements What were the important changes? Compare balance sheets for the last two years. What were the important changes? Look at the cash flow statements for the last three years to evaluate what they tell you about why the balance sheet changed and about how the companies decided to use their cash. What were the significant items on the cash flow statements? Does the company have a liquidity problem?

Answer 1

By comparing Income Statement and balance sheet of last two years findings are :

• Cost of sales has increased from 70% to 71% thus reduced gross profit.
• Marginal increase in Selling Expenses also impact the earnings
• Interest Expense has been decreased significantly (Almost Half) as compared to last year
• Capital Work in progress is increased by 220 millions.
• Company has spent amount on buildings as well they have increased compared to last year.
• There is 20% increase in Accounts payable which results into lower cash to cash cycle
• Debt Maturing in coming year i.e current portion of long term debt is very low compared to previous year.

Analysis of Cash Flow

• Company is earnings positive cash flow from operations which is a good sign.
• Cash flow from operations is mainly increased due to non payment to creditors thus Accounts payable increased significantly in balance sheet.
• In investing activities major portion is spent for property and equipment which is clearly shown from the increased value of capital work in progress and buildings value.
• In Financing Activity company has paid long term debt that is why current portion of long term debt is reduced in balance sheet.
• After all payments and investment company is still have positive cash flows.

Yes Company is facing a liquidity Issue as inventory is not part of liquid ratio and company does not have enough cash to pay its creditors.