Question

Consolidated Statements of Cash Flows 2017 2019 2,569 2018 5.569 $ $ $ 8.098 3,966 2.824 9,861 2.834 346 395 (1,844) (176) 1 5,411 2.820 543 351 (601) (5.490) (177) 515 (411) (678) 8.345 (276) (239) 1,856 (973) 313 15.242 1,385 2,000 431 (322) 71 (149) (43) 162 12.753 14,867 Amounts in millions: Years ended June 30 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR OPERATING ACTIVITIES Net earnings Depreciation and amortization Loss on early extinguishment of debt Share-based compensation expense Deferred income taxes Gain on sale of assets Goodwill and indefinite-lived intangible impairment charges Change in accounts receivable Change in inventories Change in accounts payable, accrued and other liabilities Change in other operating assets and liabilities Other TOTAL OPERATING ACTIVITIES INVESTING ACTIVITIES Capital expenditures Proceeds from asset sales Acquisitions, net of cash acquired Purchases of short-term investments Proceeds from sales and matunities of short-term investments Cash transferred at closing related to the Beauty Brands divestiture Change in other investments TOTAL INVESTING ACTIVITIES FINANCING ACTIVITIES Dividends to shareholders Change in short-term debt Additions to long-term debt Reductions of long-term debt (1) Treasury stock purchases Impact of stock options and other TOTAL FINANCING ACTIVITIES EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR (3.347) 394 (3.945) (158) 3.628 (3,717) 269 (109) (3.909) 3.928 (3384) 571 (16) (4.843) 1.488 (475) (26) 6.685) 27 (62) (3.490) (3.511) (7.498) (2,215) 2.367 (969) (5,003) 3,324 19.994) (7,310) (3.437) 5,072 (2.873) 7.000) (7.236) 2,727 3,603 (4.931) (9.2014) 2.473 (8568) (14375) 1.670 4.239 19 (3.000) 2,569 (2.529) 5.569 $ $

1. Prepare the following schedule:

Amounts in millions, years ending June 30,	2019	2018	2017
Cash, cash equivalents, and restricted cash, beginning of the year
Add/(Less):
Total Operating Activities
Total Investing Activities
Total Financing Activities
Effect of Exchange Rate Changes on cash, cash equivalents, and restricted cash
Change in Cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash, end of year

2. For the following 3 sections, provide a brief comment on the 3-year trend for each:

(1) Total Operating Activities, (2) Total Investing Activities, and (3) Total Financing Activities.

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Answer 1

Amount in million, year ending on June 30	2019	2018	2017
Cash, cash equivalent, and restricted cash, beginning of the year	2,569	5,569	8,098
Add/(Less):
Total Operating Activities	15,242	14,867	12,753
Total Investing Activities	(3,490)	(3,511)	(6,685)
Total Financing Activities	(9,994)	(14,375)	(8,568)
Effect of Exchange Rate Changes on Cash, Cash Equivalent, and Restricted Cash	(88)	19	(29)
Changes in Cash, cash equivalents, and restricted cash	1,670	(3,000)	(2,529)
Cash, Cash Equivalent , and restricted cash, end of year	4,239	2,569	5,569

1. Total operating activities:- Cash flow from operating activities indicates, the money generated from regular business activities. For example manufacturing, selling or providing service.

There is an increasing trend in cash flow from operating activities in 2018 and 2019 as compared to 2017 despite decrease net earnings, it may be because of increase in “Cost of Goods Sold” or “Operating expenses”, in the year 2018 it may be because of the reason specified above. However in 2019 it is because of high value charge of “Goodwill and in definite –lived intangible impairment charges” i.e. $ 8345 against the profit in the year 2019.   

2. Total Investing activities:- Investing activities indicates are those which are related to acquisition or disposal of long term asset and other investment, not included in cash and cash equivalent.

In all of the year 2017, 2018 and 2019 there is negative figure means the company has made acquisition of long term asset or investment than disposal of. In 2017 the organization has more investments and lesser value of proceeds from “sales and maturities of short term investment” as compared to 2018 and 2019; therefore it has high negative value as compared to 2018 and 2019. However in 2018 and 2019 the company has more value “sales and maturities of short term investment” as compared to the year 2017.

Total Financing Activities:- Cash flow from activities indicates changes in Owner’s capital and borrowings.

Cash flow from financing activities has increasing trend of negative value in the year 2018 and 2019 as compared 2017 because the company has redeemed “short term debt” in 2018 and 2019 where as in 2017 company have made short term investment. The company has also made high value of treasury stock purchase in 2018 leading to highest negative financing cash flow compared to other year