Excerpts from the cash flow statements for 2016 through 2020 fiscal years of the three tech companies,
Question:
INSTRUCTION
a) Input a mathematical formula that calculates the net change in cash for each company and for each year. Input a value of zero for the burn rate if the net cash flow is positive. (Hint: Use the SUM function to calculate the "Change in Cash" for each company for each year). Note: The beginning cash balance plus or minus the net change in cash flows during the year may not reconcile to the ending cash balance due to exchange rate differences disclosed in Box, Inc.'s annual report.
b) calculate the burn rate for the years that there is a net decrease in cash flows. The burn rate is calculated by dividing the ending cash balance by the change in cash.
c) Examine the components of calculating the burn rate. Which company(ies) have burn rates that cause you the least and the most concern? Explain.
d) Create a separate clustered column chart for each company. Show the amount of cash flow by type of cash flow activity for the four years. Include a descriptive chart title, axes labels, properly formatted axes, and a legend for each chart.
e) Describe each chart and what information each provides to investors.
Auditing The Art And Science Of Assurance Engagements
ISBN: 9780136692089
15th Canadian Edition
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan, Joanne C. Jones