Which method does Amazon use to report net cash flows from operating activities? How can you tell?

Which method does Amazon use to report net cash flows from operating activities? How can you tell?

Prior to discussion activity you should:

  • Schoenebeck and Holtzman (2013). Interpreting and Analyzing Financial Statements (6th ed.)
    • Chapter 5: Statement of Cash Flow’s
  • Fraser and Ormiston (2013). Understanding Financial Statements (10th ed.)
    • Chapter 4: Statement of Cash Flows
  • Review module 5 powerpoint
  • Watch Video: Accounting: Reporting for Cash [26.12 mins]

Discussion Background

• Review the 2007 Amazon.com (Consolidated Statements of Cash Flows [PDF File Size 2.95 Mb]) Select two of the following questions to review/discuss:

  1. Which method does Amazon use to report net cash flows from operating activities? How can you tell?
  2. Amazon earned net income in 2007. Did operations provide cash or use cash during 2007? Give the amount?
  3. How did operating cash in 2007 compare to 2006? Be specific, provide support for your answer.
  4. How did financing cash in 2007 compare to 2006? Be specific, provide support for your answer.
  5. How did investing cash in 2007 compare to 2006? Be specific, provide support for your answer.
  6. Evaluate 2007 in terms of net income, cash flows, Balance Sheet position, and overall results.

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