FIN570 Final Exam Latest 2024

2. Consider the following data for Company X (12 points):

Cash Flow For the Fiscal year period ending 12 months 12 months 12 months Dec-26-2018 Dec-25-2019 Dec-25-2020 Currency Million USD Million USD Million USD Net Income 35.0 49.0 (35.0) Depreciation & Amort. 19.0 17.0 18.0 (Gain) Loss From Sale of Assets 0.9 1.4 2.0 (Gain) Loss From Sale of Investments - - - Asset Writedown % Restructuring Costs 0.7 - - Stock-Based Compenstation 6.1 7.5 7.1 Other Operating Activities 7.6 3.2 2.3 Change in Acc. Receivable (5.5) (1.7) 0.2 Change in Inventories (0.5) (0.5) 2.5 Change in Acc. Payable 3.2 4.2 12.3 Change in Other Net Operating Assets 1.1 0.1 0.3 Cash From Ops. 67.6 80.2 9.7 Capital Expenditure (35.0) (43.0) (45.0) Cash Acquisitions - - - Divestitures - - - Invest. In Marketable & Equity Securt. - - - Cash from Investing (35.0) (43.0) (50.0) Short Term Debt Issued - - - Long Term Debt issued - - 75.0 Total Debt issued - - 75.0 Short term debt repaid - - - Long term debt repaid - - - Total debt repaid - - - Issuance of Common Stock 2.3 1.1 0.2 Repurchase of Common Stock (3.4) (10.0) - Total Dividends Paid - - - Other Financing Activities (0.8) (2.7) 0.8 Cash from Financing (1.9) (11.6) 76.0 Net Change in Cash 30.7 25.6 35.7 Are the following statements true or false (1 point for each sub question; blue box)? Briefly explain why (1 paragraph at most, one sentence should be enough, 3 points for each sub question; green box): 2.1 Company X increased overall cash flow (i.e. net change in cash) in 2020 by reducing capital expenditures. (4 points) 2.2 Despite having lower operating cash flow in 2020, company X decided to increase long-term debt (4 points) 2.3 This company managed to increase cash holdings in 2020 due to better operational performance (4 points) NOTE - The answer cells must remain in A 46/48/50 and B 46/48/50.