Using Statement of Cash Flows Information to Assess Company Life-Cycle Stage

For each of the following cash flows amounts ($ millions), identify whether the company is in the introduction, growth, maturity, or decline stage of its life cycle.

Company operating cash flow investing cash flow Financing cash flow

a $3,751 $ (2,404) $1,381

b 110 2,054 (759)

c 20 (480) 926

d (2,580) (4,200) 7,508

e (409) 5,581 (2,356)

f 2,281 (3,451) 1,957

g 6,385 3,272 (1,958)

h (365) (1,678) (3,478)

Operating Investing Financing Cycle

3751 (2404) 1381 Growth

1102 2054 (759) Maturity

20 (480) 926 Growth

(2580) (4200) 7508 Introduction

(409) 5581 (2356) Declining

2281 (3451) 1957 Growth

6385 3272 (1958) Maturity

(365) (1678) (3478) Declining

In the introduction phase, cash flow from the operating and investing activities are negative as the company generate cash for investment through financing activities for operation

In the growth phase, the activities begin to pay off gradually while investing is still on simultaneously as operating activities generate a positive cash flow, investing negative and finance positive

In the maturity phase, company start to pay offset debt and buy back the stock as the business appears stable. Operating and financing activities generate a positive cash flow and financing negative.

In declining stage, sales begin to fall and operating activities nosedive, investing may be positive as assets are being sold off and financing activities negative.