What were the firms major sources of cash? Its major uses of cash?

Alpha Corporation
Year Sources of Cash Uses Of Cash
1989 a) Short tem- loans
b) Money from long
term debt
a) Payment of long-
term loan debt
b) Investment in
depreciable
property
1990 a) Long term debt
b) Sale of
discontinued
operations
c) Gain on sale of
depreciable
property
a) Payment of long
term debt
b) Investment in
depreciable
property
c) Decrease in short
term loans
1991 a) Receivables
b) Gains on assets
sales and other
despicable
a) Investment in
depreciable assets
b) Payment of long
term debt


Gamma Corporation
Year Sources of cash Uses of Cash
1989 a) Increase customers a) Purchase of plant
and machinery
1990 a) Increase
responsibility
a) Purchase of plant
and machinery
1991 a) Increase in account
received
b) Increase in
restructuring
reserve
a) Purchase of Kienzle
business


Alpha Corporations net income was negative from year 1989 to 1991 and the net income for the three
years is negative and it is because of the depreciation costs. While the operating cash flows have been
positive and it have increased every single year. Alpha Corporation has started to generate positive
operating cash flows and it has repaid a considerable amount of the debt.
Besides, Alpha Corporation cannot generate enough cash from the operations to pay for all of its
capital expenditure. It is because in 1991 the capital investments were $157 million while the operating
cash flows amount only $125 millions.
The cash flow from the operation cannot cover both of the capital expenditures and the firms dividend
payment. This is because the company has been decreasing the amount paid dividends down to 0 in
1991. The investment of excess cash is not available for Alpha Corporation.
The main sources of cash have changed through the years to pay for the capital expenditures and or
dividends. In 1989 the issuance of debt was the main sources which is $305 million and in 1990, the
major sources of cash were the sale of discontinued operations amount $407 million and restricting
amount $384 million as well as the sales of depreciable assets is $242 million. In 1991, the main
sources of cash were the sales of depreciable assets which is $157 million and restructuring is $135
million.
From the cash flow we can see that Alpha Corporation facing loss in 1989 but it has been reduced in
1991. While the cash flow from the operation is increased throughout the years. The company also
invest in capital expenditure for example in their depreciable assets and capitalized software which
reduced from year 1989 to 1991. The company dividends payment is decreased and they use short
term and long term borrowing to finance their activities.
Alpha Corporation in good condition as it increases their performance in terms of ability to generate
cash from its operation activities. Then, the company also be able to use their resources to sustain their
business throughout the years. So, Alpha Corporation is a quite good company.


What were the firms major sources of cash? Its major uses of cash?
Beta Corporation
Year Sources of Cash Uses of Cash
1989 a) Silver received from
clients
a) Payment to
suppliers and
employees
1990 a) Cash received from
customers
a) Capital expenditure
b) Payment to
suppliers and
employees
1991 a) Money received by
customers
a) Increase of
receivables
b) Payment to
suppliers and
employees

Cash from the operations is greater than that from the net income. The increasing in net operating cash
can be accounted to depreciation which is the value is subtracted in net income but it is not from the
cash as it does not result in any cash. Then, it also because of restructuring and other unusual items as
it will reduces the net income but it does not affect the net cash.
Beta Corporation was not able to generate enough cash from the operations to finance its capital
expenditures.