LCueraultaspkryear 20158iling annua CASH FLOWS STATEMENTS of MICROSOFT, INC. In
ID: 2501682 • Letter: L
Question
LCueraultaspkryear 20158iling annua CASH FLOWS STATEMENTS of MICROSOFT, INC. In millions) Year Ended June 30, 0 Net income Adjustments to reconcile net income to net cash from operations 2015 2014 ons 12,19322,07421.863 Goodwill and asset impairments Depreciation, amortization, and other Stock-based compensation expense Net recognized losses (gains) on investments and derivatives Excess tax benefits from stock-based componsation Deferred income taxes Deferral of unearned revenue Recogrition of uneaned revenue Changes in operating assets and liabilities 7,498 5,957 2,574 5,212 2,446 2,406 (209) 44,253 (588) (331) 44,325 45,072 (44,920) (41,739) Accounts receivable Inventories Other current assets Other long-term assets Accounts payable Other current liabilities Other long-term liabilities 1,456 (272) (29) (628) (1,054) (624) 1,599 1,158 Net cash from operations 29,080 32,231 28,833 Financing Proceeds from issuance of short-terrn debt, maturities of 90 days or less, net Proceeds from issuance of debt Repayments of debt Common stock issued Common stock repurchased Common stock cash dividends paid Excess tax benefits from stock-based compensation 10,680 500 634 600 10.350 (3,888) 4,883 (1,346) (9,882) 588 362 (5.360) (7,455) 209 (8,879) Net cash used in financing 080 (8, 148) Investing Additions to property and equipment Acquisition of companies, net of cash acquired, and purchases of (5,944) (3,723) 15,013 (5,485) (4,257) intangible and other assets Purchases of investments Maturities of investments Sales of investments Securities lending payable (5,937) (72,690) 5,272 60,094 (75,396) 5,130 52,464 70,848Explanation / Answer
1. Three expenses for which microsoft actually does not make any cash payments are:
Goodwill and assets impairment
Depreciation, amortization and others
Stock based compensation expenses
2. The reason for decline in cash flow from operations is the low income in 2015 in comparison to 2013 and 2014 and the goodwill and impairment of assets in 2015.
3. Most dominant source of cash flow from financing activities is : Proceeds form issuance of short term debt and proceeds from issuance of long term debt.
4. Most dominant use of cash flow from financing activities is : Common stocks repurchased and dividends paid.
5. Most dominant source of cash flow from investing activities is : Maturities of investments and sale of investments.
6. Most dominant use of cash flow from financing activities is : Common stocks repurchased and dividends paid.
7. Calculation of free cash flow for the year 2015
= Net income + depreciation expenses
= 12193 + 5957 = $18150
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