Analysis of Montgomery Ward
SUBMITTED ON: 18TH JULY 2013
ANALYSIS OF STATEMENT OF CASH FLOW
FOR
MONTGOMERY WARD
Analysis of Montgomery Ward’s
Statement of Cash Flows
Year 9
Key Indicators
➢ Growth of Sales @ 17.2%
➢ Marginal Growth of Net Income @ 7.92% on year on year basis
➢ Continued its regular investment in acquiring fixed assets
➢ Increase in stock /inventory shows piling up of stock with possibility that store is not able to achieve its targeted sales
➢ Increase in Account Receivable shows a increase in debtors for the store
➢ Increase in Account Payable
➢ Acquisition of Lechmere, discount retailer of sporting goods & electronic products depicts that company has future expansion plans
➢ Increase in long term borrowing can be assumed for arranging funds to acquire the new company
Analysis for Year:
By analyzing all the above it shows that all though the company had a increase in sales however it could not maintain a similar trend in growth of net income, one assumption being the rise in expenses due to acquisition of new company lachmere.
However the company was able to maintain a cash flow, although the increase in account payable shows that company is not utilizing the cash and increasing its liabilities that can affect the company on long run.
Year 10
Key Indicators
➢ Marginal Decrease in Sales @ 0.5%
➢ Sharp Decrease in Net Income @ 108 % compared with last year
➢ Deferred tax liabilities lead to increase in outflow of cash
➢ Even after decrease in sales and income the store continued its regular investment in acquiring fixed assets
➢ Increase in Account Receivable shows a increase in debtors for the store
➢ Increase in Account Payable depicts store shows increase in its creditors.
➢ Issue of Capital stock to raise cash and balance its cash outflows
➢ Increase in long term
ANALYSIS OF STATEMENT OF CASH FLOW
FOR
MONTGOMERY WARD
Analysis of Montgomery Ward’s
Statement of Cash Flows
Year 9
Key Indicators
➢ Growth of Sales @ 17.2%
➢ Marginal Growth of Net Income @ 7.92% on year on year basis
➢ Continued its regular investment in acquiring fixed assets
➢ Increase in stock /inventory shows piling up of stock with possibility that store is not able to achieve its targeted sales
➢ Increase in Account Receivable shows a increase in debtors for the store
➢ Increase in Account Payable
➢ Acquisition of Lechmere, discount retailer of sporting goods & electronic products depicts that company has future expansion plans
➢ Increase in long term borrowing can be assumed for arranging funds to acquire the new company
Analysis for Year:
By analyzing all the above it shows that all though the company had a increase in sales however it could not maintain a similar trend in growth of net income, one assumption being the rise in expenses due to acquisition of new company lachmere.
However the company was able to maintain a cash flow, although the increase in account payable shows that company is not utilizing the cash and increasing its liabilities that can affect the company on long run.
Year 10
Key Indicators
➢ Marginal Decrease in Sales @ 0.5%
➢ Sharp Decrease in Net Income @ 108 % compared with last year
➢ Deferred tax liabilities lead to increase in outflow of cash
➢ Even after decrease in sales and income the store continued its regular investment in acquiring fixed assets
➢ Increase in Account Receivable shows a increase in debtors for the store
➢ Increase in Account Payable depicts store shows increase in its creditors.
➢ Issue of Capital stock to raise cash and balance its cash outflows
➢ Increase in long term