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Johns Hopkins University BUSINESS 210.650 homework 2-REVIEWED AND CORRECTED BY EXPERTS

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Advanced Financial Accounting Lanfang (Julia) Zheng Prof. Mertins Chapter 3: 3.17 3.17 Interpreting the Statement of Cash Flows. Tesla Motors manufactures high performance electric vehicles that a... re extremely slick looking. Exhibit 3.20 presents the statement of cash flows for Tesla Motors for 2010– 2012. Discuss the relations among net income, cash flows from operations, cash flows from investing activities, and cash flows from financing activities for the firm over the three-year period. - Net loss was from the net income statement - Tesla is using a indirect method on their cash flow statement - On cash flow from operation, the non cash transaction, the depreciation and amortization, change in fair value of warrant, stock-based compensation, liabilities, loss on abandonment of fixed assets, inventory write-downs, were added back on cash flow statement - change in inventories and operating lease vehicles, prepaid expenses, deferred revenue were increased on income statement so they are deducted on cash flow statement - reservation payments was decreased on income statement and added back to cash flow statement - investing and financing activities doesn’t affect income statement Describe what stage of life cycle these relations suggest for Tesla Motors. Why are negative operating cash flows less than the net losses? Where is Tesla obtaining cash, and what are they doing with it? What do you think will happen with cash flows in 2013? - The life cycle for Tesla Motors is in Introduction stage - the firm is showing negative cash flow on both operation and investing and positive cash flow on financing, which means the firm is distribute its cash from financing to operation and investing -The cash flow in 2013 possibly will remain the similar as 2013 or slightly change in decreasing trend since the firm might do less investing and have less loss 3.22 Extracting Performance Trends from the Statement of Cash Flows. The Apollo Group is one of the largest providers of private education, and runs numerous programs and services, including the University of Phoenix. Exhibit 3.25 provides the statement of cash flows for 2012. Discuss the relations between net income and cash flow from operations and among cash flows from operating, investing, and financing activities for the firm, especially for 2012. Identify sig- nals that might raise concerns for an analyst. [Show More]

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