Module 5: Critical Thinking | Schoology

Read and complete case study 10-10, "Eat at My Restaurant" (attached) in your text. Address the following elements, which are also ?required? elements at the end of the case study:

• Comment on the difference between net cash provided by operating activities and net income. Speculate on which number is likely to be the better indicator of long-term profitability.
• Comment on the data reviewed for each firm.
• Do any of these firms appear to have a cash flow problem?

Your answers should be in an essay form with an introduction and conclusion; ensure you are addressing each element clearly and thoroughly, following these guidelines:

• Requirement (a) of the problem should be answered in general terms; you do not need to consider the 3 firms in the case. However, you do need to make a choice and rationalize that choice.
• When addressing requirement (b), you should make AT LEAST 4 observations on each firm, focusing on the cash flow ratios provided.
• All information should be considered when answering requirement (c). Even if you don't think any one company is in "trouble," you should still choose a company and support your choice.

Your paper should be 3-5 pages long

Read and complete case study 10-10, "Eat at My Restaurant" (attached) in your text. Address the following elements, which are also \"required\" elements at the end of the case study: Comment on the difference between net cash provided by operating activities and net income. Speculate on which number is likely to be the better indicator of long-term profitability. Comment on the data reviewed for each firm. Do any of these firms appear to have a cash flow problem? Your answers should be in an essay form with an introduction and conclusion; ensure you are addressing each element clearly and thoroughly, following these guidelines: Requirement (a) of the problem should be answered in general terms; you do not need to consider the 3 firms in the case. However, you do need to make a choice and rationalize that choice. When addressing requirement (b), you should make AT LEAST 4 observations on each firm, focusing on the cash flow ratios provided. All information should be considered when answering requirement (c). Even if you don't think any one company is in "trouble," you should still choose a company and support your choice. Your paper should be 3-5 pages long Instructions: 1a: For requirement a. above, review the components of net cash provided by operating activities and briefly explain the key components that make up the net cash provided by operating activities; for example depreciation/amortization is added back to net income to derive the net amount provided by operating activities and other. You may discuss this in general terms. Review exhibit 10-10 pages 435 and 436 and briefly explain the other components. Speculate on which number is likely to be the better indicator of long-term profitability. For this question, one of the following is determined to be a good indicator of long-term profitability in accordance with GAAP: net income, net sales, other income, average operating assets and average fixed assets. Identify that indicator and explain why it's determined to be a good indicator of long-term profitability. Out of the elements mentioned above, one of them is determined to be a good indicator of long-term profitability according to GAAP; I wouldn't give that out, I would like you to find that out yourselves with the hint provided. 1b. Comment on the data reviewed for each firm. For this assignment, please pay attention to the fluctuation. Review and briefly comment on the fluctuation of each component line by line and what you think might have caused the fluctuation. Please focus on the ratios/fluctuation: For example, I expect you to tell me that for Yum Brands Inc. the net cash provided by operating activities increased by $564 million between 2009 and 2010. Operating cash flow/cash dividends increased by 0.9% and so on. For Panera Bread for example, net cash provided by operating activities increased approximately $22.7million between 2009 and 2010, representing approximately 90 percent of total increase in net cash provided by operating activities. Tell me what the reduction means to Panera's cash flows Next is Starbucks, and so on based on each line item. 1c. Do any of these firms appear to have a cash flow problem? This part will be easier once you have completed part 1b. That is after analyzing the fluctuation! Make sure you choose a firm and support your choice with data