The consolidated statements of cash flows for Cargojet Inc. are in Exhibit 5.24. The company provides domestic air cargo services between 14 major Canadian cities and also operates international routes for cargo customers.

Required 

a. In total, how much did Cargojet’s cash change during 2020? Was this an increase or a decrease? How did this compare with the previous year? 

b. How did Cargojet’s net income or loss in 2020 compare with the cash flows from operating activities? What was the largest difference between these two amounts? 

c. What effect did the change in the company’s trade and other receivables have on cash flows from operating activities in 2020? What does this tell you about the balance owed by the company’s customers? 

d. What effect did the change in the company’s trade and other payables have on cash flows from operating activities in 2020? What does this tell you about the balance owed to these creditors? e. Calculate Cargojet’s net free cash flow for 2020 and 2019. Is the trend positive or negative? 

f. Cargojet had current liabilities of $180.6 million at the end of 2020 and $114.5 million at the end of 2019. Calculate Cargojet’s operating cash flow ratio for both years. What do these results tell you about the company’s ability to generate sufficient cash to cover its current liabilities? 

g. If you were a user of Cargojet’s financial statements—a banker or an investor—how would you interpret the company’s cash flow pattern? How would you assess the risk of a loan to or an investment in Cargojet? Do you think the company is growing rapidly?

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CARGOJET INC. Consolidated Statements of Cash Flows Year ended December 31, 2020 and 2019 (in millions of Canadian dollars) Cash flows from operating activities Net (loss) earnings Adjustments to reconcile net cash from operating activities Depreciation of property, plant and equipment and amortization of contract assets Share-based compensation Finance costs Crew incentive Gain on disposal of property, plant and equipment Impairment of property, plant and equipment Employee pension liability Income tax provision Fair value adjustment on stock warrant Gain on total return swap Unrealized foreign exchange gain Gain on extinguishment of debt Other gains and expenses Interest paid Cash generated from operating activities Changes in non-cash working capital items and deposits Contract acquisition asset Trade and other receivables Inventories Prepaid expenses and deposits Trade and other payables Net cash generated from operating activities CARGOJET INC. Consolidated Statements of Cash Flows Year ended December 31, 2020 and 2019 (in millions of Canadian dollars) Cash flows from investing activities Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment Proceeds from insurance claim Proceeds from total return swap & settlement of derivative financial instrument Acquisition of business Settlement of provision Net cash used in investing activities Cash flows from financing activities Repayment of borrowings Proceeds from borrowings Repayment of obligations under lease liabilities Options settled in cash Proceeds from debenture issuance net of issuance costs Withholding tax paid on vested RSU's Dividends paid to shareholders Net cash (used in) provided from financing activities Net change in cash Cash (bank overdraft), beginning of Year Cash, end of year Note 5,8 11 18 11 8 8 17 15 5 27 19 13 Note 8 19 8 27 10,13 11 14 11 20 2020 $ (87.8) 109.1 32.9 39.6 8.5 (0.8) 0.6 13.2 44.0 177.9 (50.8) (2.2) (1.1) (24.1) 259.0 10.0 0.8 0.9 21.9 292.6 2020 14.5 (127.7) (171.3) (77.3) (7.1) 109.9 2019 (2.4) (14.6) (162.8) 2.1 1.6 $ 3.7 $ 11.6 94.0 10.5 43.6 1.9 (1.3) 3.5 9.2 (146.6) (218.1) 0.8 1.3 3.6 0.9 (7.8) (4.3) (4.7) (25.4) 131.7 (6.5) 13.9 (0.7) (0.7) 7.2 144.9 2019 4.1 (3.1) (1.4) (217.2) (61.6) 99.8 (55.5) (2.0) 109.7 (3.2) (12.4) 74.8 2.5 (0.9) $ 1.6