Refer to the RadioShack Corporation, consolidated financial statements in Appendix B at the end of this book. Focus on the year ended December 31, 2010.
1. What is RadioShack Corporation’s main source of cash? Is this good news or bad news to RadioShack managers, stockholders, and creditors? What is RadioShack Corporation’s main use of cash? Is this good news or bad news? Discuss your reasoning.
2. Explain briefly the three most significant differences between net cash provided by operations and net income.
3. Did RadioShack Corporation buy or sell more fixed assets during 2010 than in previous years? How can you tell?
4. Identify the largest two items in the financing activities section of the Consolidated Statement of Cash Flows. Explain the company’s probable reasoning behind these two expenditures.
5. Evaluate RadioShack Corporation’s overall performance for 2010 in terms of cash flows. Be as specific as you can. What other information would be helpful to you in making your evaluation (Challenge)?