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Decision Case of Apple: Statement of Cash Flows

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Decision Case: Reading Apple Computer's Statement of Cash Flows

The following items appeared in the investing activates selection of apple computer's 2008 statement of cash flows. (All amounts are in million of dollars.)

2008 / 2007 / 2006
Purchases of short-term investments $(22,965) $(11,719) $(7,255)
Proceeds from maturities of short-term investments 11,804 6,483 7,226
Proceeds from sales of short-term investments 4,439 2,941 1,086
Purchases of long-term investments (38) (17) (25)

1. What amount did Apple spend in 2008 to purchase short-term investments? How does this amount compare to the amounts spent in the two prior years?
2. What amount did Apple receive from investments that matured in 2008? How does this amount compare to the amounts received in the two prior years?
3. The third line in the preceding excerpt reports proceeds from sales, rather than maturities, of short-term investments. Why would certain types of investments mature while others would be sold?

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Solution Summary

This solution discusses Apple Computer's statement of cash flows regarding investments.

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1. Apple spent $22,965 million dollars on purchase of short term investments in 2008. This amount is significantly higher as compared to the amount spent for purchase of short term investments in 2007 and 2006 when investments costing $11,719 million dollars and $7,255 million dollars respectively were purchased.

2. Apple received ...

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