Financial Statement of Cash Flows Report of TOYS R US

3 pages
720 words
Middlebury College
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Since Toys R Us has been into business, it has not been doing well and it has been producing negative net income. Lack of resources contributed to it not having succeeded as a business and did not follow the necessary steps to grow. The business has had a bad history in financial matters reporting negative figures in its financial statements. This means that the stock produced does not meet the targeted amount of profits per year. Therefore the company is facing a bankruptcy issue in the near future. Since the cash flow produced by the operations of the company is negative, it, therefore, means that Toy R Us is unable to pay dividends, debts and meet its obligations. The company borrows from banks and other financial institutions, it does not have enough capital to finance its business operations due to low-income achieved at the end of the year. From the year 2015, the amount produced by operating activities was $139 million while that of 2016 was $125 a difference of $14 million dollars. Depreciation and amortization were $87 million and $80 million dollars for the year 2015 and 2016 respectively. Amortization and written off debts issuance costs and debt discount was $9 for 2015 and $11 million for 2015, a decrease of $4 million dollars. The deferred income taxes figures for the two-year periods the business were constant with no change reporting $2 million dollars. In 2015 $6 million dollars of non-cash portion of asset impairments and other charges were reported. However, this figure changed to 0 in the year 2016 for there were no impairments done. Unrealized gains in foreign exchange amounted to a negative figure since the trading currencies were stronger compared to the local currency for both years 2015 and 2016. This was ($5) and ($13) for 2015 and 2016 respectively. Cash received from operating assets was negative also for both years the business was in operations. In 2015 the received from operating activities was ($744) million while that of 2016 was ($630) million. This figures resulted due to changes that occurred in operating assets and liabilities. Changes in liabilities and assets information are provided in the statement of cash flows. Investing activities cash flow produced negative figures as well due to the lack of resources to carry out business. For the year ended 31st December 2016 the amount was ($48) million dollars while for the year 2015 $42 million. That amount of the year 2016 and 2015 was as a result of the difference between capital expenditures and proceedings from fixed assets sales. The amounts produced from investing activities was used for operating activities. Cash flows from financing activities produced a positive figure due to the additions and deductions made on borrowing and repayments made for the year 2015 and 2016 respectively. The resulting amount for the year 2015 was $430million while in the year 2016 the amount was $563 million. The cash and cash equivalents for the 2 years were positive as net decreased for the period. The year 2015 had $453 million while 2016 had $458 million.

Toys R Us uses a straight line method to calculate amortization and depreciation. The

Since Toys R Us Company is not efficient and its resources are limited producing a negative cash flow, it is unable to pay off its debts, meet its obligations and pay off its debts. The negative net income indicated the company has gone bankrupt since it cannot pay off its debts.

Income statement of Toys R Us

Condensed Consolidated Statements of Cash FlowsThree Months Ended


Cash Flows from Operating Activities

Net loss $125 $139

Adjustments to reconcile Net loss to Net cash used in operating activities

Depreciation and amortization 8087

Amortization and written off debt issuance cost and debt discount 911

Deferred income taxes 22

Non-cash portion of asset impairments and other charges06

Unrealized gains on foreign exchange (13)(5)


Changes in operating assets and liabilities

Accounts and other receivables 716

Merchandise and inventories (101)(98)

Prepaid expenses and other operating assets (21)(24)

Accounts payable, accrued expenses and other liabilities (576)(466)

Income tax payable, net (22)(20)

Net cash used in operating activities (744)(630)

Cash Flows from Investing Activities

Capital expenditures (50)(43)

Proceeds from sales of fixed assets 22

Increase in restricted cash 0(1)

Net cash used in investing activities (48)(42)

Cash Flows from Financing Activities

Long-debt borrowings 563478

Long-term debt repayments (9)(54)

Short-term debt borrowings 56

Capitalized debt issuance cost 10

Distribution to non-controlling interest (12)0

Net cash provided by financing activities 546430

Effect of exchange rate changes on cash and cash equivalents 243

Cash and cash equivalents

Net decrease during period (222) (245)

Cash and cash equivalents at beginning of period 680 698

Cash and cash equivalent at end of period $458 $453





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