Business Application Case Analyzing cash flow information at two
real-world companies
The following data are based on information in the 2008 annual reports of H&R Block. Inc., and Jackson Hewitt Tax Services. Inc. Dollar amounts are in thousands.
H&R Block, Inc., has subsidiaries that provide tax, investment, retail banking, accounting, and business consulting services and products in the United States, Canada, and Australia. For the fiscal year ended June 30, 2008, the Company served approximately 23.5 million customers.
In the fiscal year ended April 30, 2008, Jackson Hewitt Tax Services, Inc., had a network of 6,763 franchised and Company-owned offices that provided computerized preparation of individual income tax returns in the United States. These offices prepared 3.39 million tax returns.
| HSR Block | Jackson Hewitt |
Assets | $5,623,425 | $600,065 |
Liabilities | 4,635,607 | 363,548 |
Stockholders’ equity | 987,818 | 236,517 |
Cash flows from operating activities | 215,787 | 33,949 |
Cash flows from financing activities | 1,147,289 | (31,048) |
Cash flows from investing activities | (1,558,069) | 0 |
Cash balance at the beginning of 2008 | 921,838 | 1,693 |
Required
a. Calculate each Company’s net income and net change in cash for 2008.
b. Calculate each Company’s ending cash balance for 2008.
c. Notice that cash flows from investing activities were negative for Jackson Hewitt. Do you think this represents something positive or negative about the Company? Write a brief explanation of your answer.
d. Notice that cash flows from financing activities were negative for H&R Block. Write a brief explanation as to what might have caused this.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.