Question

?(US$ millions)	?12/31/2016	?12/31/2015	?12/31/2014	?12/31/2013
Net income	$13,090	$12,050	$11,000	$10,070
Depreciation expense	6,470	6,350	5,050	3,950
Changes in working capital	1,200	2,290	2,440	950
Cash from operating activities	$20,760	$20,690	$18,490	$14,970
Capital expenditures	$(16,000)	$(14,510)	$(14,040)	$(12,260)
Cash from investing activities	$(16,000)	$(14,510)	$(14,040)	$(12,260)
Interest and financing cash flow items	$(300)	$(300)	$(380)	$50
Total cash dividends paid	(3,560)	(2,820)	(2,520)	(2,250)
Issuance? (retirement) of stock	(8,010)	(1,520)	(3,590)	(4,450)
Issuance? (retirement) of debt	1,500	(80)	4,000	4,110
Cash from financing activities	$(10,370)	$(4,720)	$(2,490)	$(2,540)
Net change in cash	$(5,610)	$1,460	$1,960	$ 170

A. How much did BigBox invest in new capital expenditures over the? period?

B. Describe? BigBox's sources of financing in the financial markets over the period. (round to the nearest integer)

C. Based solely on the cash flow statements for 2013 through? 2016, write a brief narrative that describes the major activities of? BigBox's management team over the period.

Answer 1

A. Big Box's capital expenditure = 16000 + 14510 + 14040 + 12260 = 56810

B. Big Boxs major source of financing was debt since it has only retired stock over the years.

Issuance of debt= 1500+ 4000+ 4110 = 9610

C. The company over the years has been heavily investing in capital expenditures coupled with retirement of stock and payment of high cash dividends. The firm is seemingly reducing its capital liability and increasing the debt component since it is majorly financing through issue of debt instruments. The company is also putting in much of its retained earnings in capital expansion.