Question

Investing Activities 2014 2015 2016 2017 2018 + Capital Expenditures (1.99B) (2.39B) (2.65B) (2.5B) (2.97B) Capital Expenditures (Fixed Assets) (1.99B) (2.39B) (2.65B) (2.5B) (2.97B) Capital Expenditures (Other Assets) Net Assets from Acquisitions Sale of Fixed Assets & Businesses Purchase/Sale of Investments (97M) (2.5B) 2.41B (3M) 106M (1.28B) 1.39B (67M) 277M (1.43B) 1.71B 18M (1.06B) 1.08B Purchase of Investments Sale/Maturity of Investments 1.43B Other Uses Other Sources + Net Investing Cash Flow (20M) 27M 30M 4M (2.09B) (2.48B) (2.35B) (2.37B) (2.958)

Using the above investing cash flow statement from Costco Corporation, answer the following question:

What created the largest cash outflow and largest cash inflow in the most recent year (2018). Did investing activities provide or use cash for each of the years prevented? Explain.

Thanks!

Answer 1

Answer

• Largest Cash outflow in the year 2018

= Capital Expenditures on Fixed Assets of $ 2.97 billion

• Largest Cash inflow in the year 2018

=Sale or maturity of Investment = $ 1.08 billion

• The investing activities actually USED cash for each of the years.

--This is because the Investing Cash outflows are MORE than Investing Cash inflows.

--It is therefore that ‘Net Investing Cash flow’ for each year is a NEGATIVE amount.