Analyzing Statement of Cash Flows

Part 1) Using the company (Tesla) that you selected from the approved list, access its most recent financial statements, form 10-K. Include the name of the company in your subject line, and if possible, do not choose a company about which one of your classmates has already posted. Navigate to the statement of cash flows that was prepared using an indirect method. Discuss an item that was included when calculating net income, but is adjusted as an increase or decrease to determine cash provided by (used in/by) operating activities. Note, increases and decreases in the operation activities section of the cash flows result from changes in current assets, current liabilities, gains, and losses. Include a summary of how that particular item impacted net income (or net loss) and why an adjustment might be necessary to reconcile net income to net cash flows from operating activities. If possible, use an item not already used in a classmate’s post. In your post, include a screenshot of the statement of cash flows you are analyzing or provide the URL and applicable page number for the statement of cash flows. Part 2) Assessment Description

The purpose of this assignment is to analyze a statement of cash flows to determine the financial strengths and weaknesses of a company.

Understanding a company’s major sources and uses of cash, and how cash is being used in the business through the analysis of the statement of cash flows, is essential. This analysis guides financial decision-making and is used to determine financial strengths and weaknesses within the company.

The accounting manager has asked you to prepare a 5- to 10-minute presentation for company stakeholders summarizing your analysis of the statement of cash flows and the financial strengths and weaknesses of the company.

Using the company that you selected from the approved list, review the Management Discussion and Analysis (MD&A) section of the annual report and the management’s discussion regarding the statement of cash flows or any discussion on the operating, investing, or financing activities of the company. In addition, refer to the statement of cash flows financial statement.

Create a PowerPoint presentation (5-8 slides) that summarizes your analysis and addresses the following. Include screenshots from the statement of cash flows as needed to illustrate key findings and information.

1. Discuss the company’s major sources of cash in each of the three sections of the statement of cash flows. Provide at least two major sources of cash for each section.
2. Discuss the company’s major uses of cash in each of the three sections of the statement of cash flows. Provide at least two major sources of cash for each section.
3. Discuss the major differences between the net income and the cash provided or used by operating activities, and explain the cause of the major difference between the two values. Note that you may need to reconcile the differences between net income reported and the subtotal of cash provided or used by “operating” activities. What were the reconciling items, how were these accounts adjusted, and why do we not just report “net income” without adjustments?
4. Summarize the financial strengths of the business and justify your analysis based on evidence in the statement of cash flows. Include discussion as to whether or not you anticipate the company will experience continued success and explain your answer. Only information from the statement of cash flow should be referenced. Note that this analysis will be more than just the amounts of either the cash provided or used. You may need to review the notes in the MD&A for additional information.
5. Summarize the financial weaknesses of the business and justify your analysis based on evidence in the statement of cash flows. Include discussion as to whether or not you anticipate the company will experience continued challenges in this area and explain your answer. Only information from the statement of cash flows should be referenced. Note that this analysis will be more than just the amounts of either the cash provided or used. You may need to review the notes in the MD&A for additional information.

General Requirements

Using the PowerPoint you created, practice your presentation. Speaker notes are required.

While APA style is not required for the body of this assignment, solid academic writing is expected, and documentation of sources should be presented using APA formatting guidelines.

This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.